"Managed Care Update"

Aetna Threatens to Expel Docs for Out-of-Network Lab Referrals

In letter, insurer reminded in-network physician that Quest Diagnostics Inc. is Aetna’s “national preferred lab.”

MANAGED CARE PLANS are taking aggressive steps to keep clinical lab testing within their preferred networks. In particular, Aetna, Inc., is earning a reputation as one of the toughest insurers in this regard.

Most recently, in a letter sent to at least one network physician, Aetna warned the physician that, if the doctor continued to refer patients to out-of-network labs, Aetna would take actions against the physician that may include exclusion from participating in Aetna’s network.

Signed by Richard J. Gentleman, Aetna’s Regional Network Operations Head, the letter also said that the physician in question received a similar warning last year. This is the “second and final notice,” Gentleman wrote.

Out-Of-Network Referrals

“In April 2012, we sent a letter requesting that your practice stop referring our members to out-of-network labs,” the letter said. “Our claims data shows that this has not happened. The rate your practice refers our members to out-of-network labs has not changed since our initial letter.

“Your patient—our members—pay much more out of pocket when they use out-of-network providers, including labs,” he wrote. “Therefore, we again ask that your practice refer our members to in-network providers. Failure to do so will result in one or more of the following actions:

  1. Notice to our members in our DocFind online provider directory. The notice will state that you regularly refer to out-of-network providers, resulting in potentially much higher out-of-pocket costs for your patients.
  2. A request for an amendment to your agreement.
  3. The end of your participation with us.”

One way to interpret Aetna’s motives in sending this letter to a physician is that the insurer continues to see a significant volume of lab tests go out-of-network. This means that Aetna’s joint marketing efforts with its national contract laboratory, Quest Diagnostics Incorporated, has failed to persuade certain physicians to stop using out-of-network laboratories.

Assuming that assumption is correct, then Aetna’s latest letter could be a sign that, independent of the price of a lab test, some physicians believe they get better service by using an out-of-network laboratory. This marketplace reality is not often discussed publicly by the large health insurers, as it would be an acknowledgement that price is the primary factor when they select their in-network laboratory providers.

In May, THE DARK REPORT reported on a letter Gentleman sent to clinical laboratories saying Aetna would cut the prices it pays for lab tests to a level that is substantionally below Medicare prices, effective July 1. At that time, Aetna spokesman Ethan Slavin said, “We routinely assess our network adequacy and costs by locale or region and adjust as necessary. Our job is to negotiate affordable rates for our members.”

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