DUE
PROCESS RIGHTS
FOR PHYSICIANS UNDER
THE POTVIN
CASE
The long-awaited Potvin
v. Metropolitan Life decision by the California Supreme Court has
finally provided the health industry in California with some guidelines as
to whether physicians have due process rights to challenge decisions by
health plans to remove physicians from their provider panels.
In general, physicians are entitled to due process if
they are being removed from a preferred provider organization’s provider
panel. However, there are
certain limitations to this right under Potvin.
1.
Are All Health Plans Governed by Potvin?
It is clear that the Potvin
decision applies to de-credentialing by a health insurance company’s
preferred provider organization (“PPO”).
It is not clear whether it applies to
de-credentialing by a health care service plan’s preferred provider
organization that is regulated under the Health and Safety Code by the
Department of Corporations. However,
health care service plans should anticipate that physicians will argue
that Potvin applies to them and
their preferred provider organizations as well.
2.
Does Potvin Apply To All De-credentialing Disputes?
Potvin
applies to de-credentialing disputes concerning quality of care issues
such as the medical malpractice loss experience of a PPO panel provider.
It is unclear whether Potvin
will apply when a PPO engages in economic de-selection of its panel
providers. The Supreme Court
specifically held that its Potvin decision
did not address the issue of de-credentialing by a PPO to limit its
service in a geographic area or medical field to reduce the total number
of physicians on its preferred provider panel.
However, PPO’s should expect physicians to cite Potvin
in economic de-selection disputes.
3.
Does Potvin
Apply to All Physicians Facing De-credentialing?
Potvin
makes clear that physicians are entitled to due process if their
termination from a PPO panel would significantly impair an ordinary,
competent physician’s ability to practice medicine or a medical
specialty in a particular geographic area.
The Supreme Court held that a physician’s reduction
in the number of patients or loss of income can be evidence of significant
impairment of an ordinary, competent physician’s ability to practice
medicine or a medical specialty in a particular geographic area.
4.
Is The Physician Entitled to Due Process?
If a physician is de-credentialed by a
PPO, and the
physician will experience a significant impairment in his or her ability
to practice medicine or a medical specialty in particular geographic area
as would an ordinary, competent physician, the physician is entitled to a
substantively rational and procedurally fair de-credentialing process.
5.
What Are Due Process Rights?
A substantively rational and procedurally fair
de-credentialing process generally involves notice of the specific reasons
why a PPO wishes to remove the physician from its panel, notice of the
specific evidence in support of the reasons why the PPO wishes to
de-credential the physician, a hearing before the PPO once the physician
has adequate time to prepare a response to the PPO, an opportunity to
question any adverse witnesses, and an opportunity to present evidence and
witnesses in the physician’s favor.
The hearing should be similar to that utilized by hospitals in
credentialing disputes involving physicians on its medical staffs.
6.
Who Decides If There Is Significant Impairment To My Practice?
It is unclear under Potvin
how PPO’s and physicians will deal with the issue of whether the
de-credentialing will significantly impair the ordinary, competent
physician’s ability to practice medicine or a medical specialty in a
particular geographic area.
There will be many cases where the answer to this
question will be obvious to both the physician and the PPO. In those cases where the answer is in dispute, the PPO may
choose to conduct a hearing on this issue.
It is unclear whether the PPO would be obligated to provide due
process rights to the physician on the issue of whether the
de-credentialing would result in significant impairment to the ordinary,
competent physician’s ability to practice medicine or a medical
specialty in a particular geographic area.
The PPO should expect physicians to demand due process rights on
this issue as well.
The PPO may choose a separate hearing on this
threshold issue, or it may choose to deal with both issues in the same
hearing.
7.
Can The PPO De-credential The Physician?
Under Potvin,
PPO’s may de-credential the physician if the procedure used to
de-credential the physician is substantively rational and procedurally
fair in that it provides due process rights for the physician.
-May 2000
