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THE BATTLE FOR PATIENTS REBELLIOUS DOCTORS SQUARE OFF WITH HMO

For physicians, the decision by Promedicus Health Group to quit Independent Health at the end of the year boils down to who controls how and where patients obtain health care.

Doctors have grumbled about managed care since health maintenance organizations started penny-pinching, and one of their biggest beefs has been that health maintenance organizations wield too much power.

Physicians may provide the care. But HMOs pay their bills and can drop them, a threat to their incomes.

That's why some physicians greeted what Promedicus did on Tuesday as a welcome mutiny, even though it will inconvenience thousands of patients.

"Amazing," said Dr. Nedra Harrison, president of the Erie County Medical Society. "I can't blame them. Doctors are fed up with the restrictions of managed care."

Promedicus, one of the newest and largest medical groups in the region, contends Independent Health's policies are so restrictive they have interfered with providing quality care.

"Finances are not the issue," said Dr. Robert J. Erickson, president and chief executive officer. "What this is about is ensuring that the right care is given at the right time in the right setting."

Promedicus was formed several months ago from the merger of two medical groups, Buffalo Family Practice and Medical Partners of Western New York. Together, they have 170,000 patients, including 26,000 covered by Independent Health.

Buffalo Family Practice, which was concentrated in the Southtowns, has been involved with Independent Health since 1989. Medical Partners was the group of physicians employed by Health Care Plan until 1997. The doctors continued to serve Health Care Plan's patients, but as a separate medical group that contracted with the HMO and took patients from other insurance companies.

The consolidation is part of a bigger-is-better trend in health care. It comes at a time when HMOs are making exclusive deals with some hospitals while restricting patient access to others.

"One of the reasons medical groups and hospitals are coming together to form larger groups is to get more clout in the marketplace," said William Pike, president of the Healthcare Association of Western New York.

"Promedicus appears to be making a statement," he said. "And, it goes to the heart of a question on the minds of a lot of doctors these days. Who's in control -- the physicians, the hospitals or the HMOs?"

Thousands of Promedicus patients will have to start looking for a new doctor or HMO. Promedicus is betting their loyalty to the doctors is stronger than whatever ties they have to Independent Health.

"We're taking a financial risk," said Erickson, who acknowledged that the action may confuse and inconvenience many patients.

"This decision was not taken lightly," he said. "But we're convinced that to provide quality care we need to terminate our participation. We see this as a statement about standing up for our patients, about being an advocate for our patients."

Erickson declined to cite a specific case but said Independent Health's policies interfered with physicians' decisions about procedures, medications, tests and referrals. The medical group also criticized Independent Health's recent choice of the CGF Health System as its exclusive hospital network for the HMO's Medicare patients in Erie County.

The decision means Independent Health members 65 and older won't be able to use the area's Catholic hospitals after Jan. 1 except for emergencies and will have limited access to Roswell Park Cancer Institute and Erie County Medical Center.

Erickson has served on the board of directors at the Catholic Health System and is affiliated with Mercy Hospital in South Buffalo.

The divorce between Independent Health and Promedicus is only the latest flare-up here over managed care. In the last year, Buffalo-area physicians have engaged in a war of words in the media over the restrictions of HMOs. They fought an HMO over millions of dollars in disputed fees. They sued and settled in court over the accuracy of HMO finances.

Some of them also continued preparations to start an HMO formed by doctors upset about insurers meddling in their decisions.

"What Promedicus did is a good step," said Dr. David Scamurra, one of the founders of MDNY Healthcare, which plans to begin enrolling members this year. "HMOs feel as though they own the patients. Promedicus shows that you can recognize economic limitations in medicine but remain the patient's advocate."

Independent Health is the region's largest HMO with more than 400,000 members. Its main competitors are Health Care Plan and Community Blue, the HMO of Blue Cross and Blue Shield.

The Promedicus action coincides with open enrollment for many employees, the time when they choose a health plan for the following year.

But some patients may work at companies that offer only Independent Health or that do not hold open enrollment until next year, although Health Care Plan has agreed to accept patients off their normal enrollment cycle.

The Promedicus decision took Independent Health by surprise.

It also coincided with publication of an annual ranking of HMOs by U.S. News & World Report that puts Independent Health and Health Care Plan among the top 30 of 271 plans in quality and patient satisfaction.

The HMO, like other insurers, currently is renegotiating annual contracts with physicians for next year. The loss of more than 100 doctors and the potential loss of thousands of members brought a harsh response.

Independent Health characterized the decision as making "no sense whatsoever." The company suggested Promedicus experienced cash-flow problems, asked the HMO for a $30,000 cash advance and quit when Independent Health refused to give them the money.

"Don't be misled. Promedicus' move is not about quality; it's all about money," said Dr. Michael Cropp, the HMO's medical director.

"Based on our data, it's our impression this for-profit practice may be having financial problems, and it's unfortunate that they are inconveniencing and disrupting their patients' lives and using them as pawns as a way of getting back at Independent Health," Cropp said.

Erickson downplayed the cash advance, saying the money represented a "small amount" the physicians would receive if they met a set of performance measures at the HMO.

He said the physicians asked the HMO if they could receive the payments earlier than usual. Independent Health's refusal, he added, did not weigh on the physicians decision to quit the HMO.

Cropp also questioned how Promedicus could complain about Independent Health's policies when the medical group participates in the doctor-run association that represents physicians at the HMO.

Erickson countered that the association only advised the HMO and recently was restructured to become a part of the Independent Health corporation. The change stemmed from tension between the doctors and HMO over budgets, fees and medical policies.

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