UnitedHealthcare Cutting Physician Fees Without Notice or Opportunity to Terminate
[Posted 04/28/08]

CMA has asked the Department of Insurance to force UnitedHealthcare to comply with state law, which requires insurance companies to give contracted physicians 45 days notice of any material changes to their contracts. Currently, United makes significant changes to contracts – namely its fee schedules – under the guise of “routine maintenance”, without notifying physicians or giving them the opportunity to cancel their contracts.

United’s “progressive fee schedules” are developed using third party data (such as Medicare’s relative value units). According to United, “routine maintenance” occurs when it “mechanically incorporates revised information created by a third party that is the source for a portion of the fee schedule.” CMA has learned that payments for some CPT codes were reduced by up to 9.5 percent as a result of United’s most recent fee schedule revision.

Affected physicians were not given prior notice of these fee reductions, nor were they given the opportunity to terminate as required by California law.  Over 50 percent of physicians contracted with United Healthcare in California are on these so-called progressive fee schedules.

CMA has requested that DOI declare these contract provisions void, unlawful, and unenforceable.

Click here to read CMA's letter to United Healthcare on this issue.