State Supreme Court Agrees With Cal. Medical Assoc: Says Physicians Cannot Be Arbitrarily Removed From Health Plan Panels

May 10, 2000, 01:00 ET from California Medical Association

    SAN FRANCISCO, May 10 /PRNewswire/ -- In a significant ruling for
 physicians and their patients, the California Supreme Court has ruled that
 managed care plans cannot arbitrarily terminate physicians from provider
 panels. The high court, in its decision on a 1992 case filed by an Orange
 County physician who was taken off a preferred-provider list by MetLife, said
 any such removals must be "both substantively rational and procedurally fair."
     In its 4-3 ruling Monday on Louis E. Potvin v. Metropolitan Life Insurance
 Co., the court relied heavily on an amicus brief submitted by the California
 Medical Association and the American Medical Association. Agreeing with CMA
 and AMA, the court declared that insurance companies, in making such arbitrary
 decisions, have tremendous powers to destroy medical practices. "If
 participation in managed care arrangements is a practical necessity for
 physicians generally, and if only a handful of health care entities have a
 virtual monopoly on managed care, removing individual physicians from
 preferred provider networks controlled by these entities could significantly
 impair those physicians' practice of medicine," the ruling said.
     The justices also found that there is a concern for the public interest
 because under managed care, patients often cannot choose their own doctors and
 are limited to those physicians who are on a health plan's panel. When a plan
 arbitrarily terminates a physician, the patient is arbitrarily deprived of a
 relationship with his or her physician. Louis E. Potvin, M.D., former
 president of the Orange County Medical Association and former chairman of the
 Obstetrics and Gynecology Department at Mission Regional Hospital, had been
 notified in 1992 that he would be removed from MetLife's preferred provider
 list. Dr. Potvin, now deceased, filed suit against MetLife in Los Angeles
 Superior Court, arguing that his removal from MetLife's provider list violated
 common law practices against "arbitrary expulsion."
     "This is a great victory for physicians and their patients," said
 CMA President Marie Kuffner, M.D. "The California Supreme Court has upheld a
 CMA tenet that basic fairness must be assured before decisions are made that
 adversely affect a physician's status -- and patients' access to their
 physicians in a managed care situation. Neither patients nor doctors should
 suffer needlessly."
     Dr. Potvin said, when filing the lawsuit, that MetLife had devastated his
 practice. Besides losing MetLife patients, he said he had been required to
 reveal his termination to other insurers and managed care entities, which then
 removed him from their preferred provider lists, further reducing his
     Dr. Potvin's lead counsel Henry Fenton, J.D., is available for comment at
 310-444-5244. To find the complete California Supreme Court decision in Potvin
 online, go to:
     The California Medical Association represents more than 34,000 California
 physicians from all regions, modes of practice and medical specialties. CMA is
 dedicated to the health of all Californians.

SOURCE California Medical Association