UnitedHealth Threatens to Fine Doctors for Sending Specimens to Quest

In a totally predictable fashion, the UnitedHealth lab contract, previously held by Quest Diagnostics and recently awarded to LabCorp, is getting ugly because there is so much money at stake. Again, perhaps predictably, the community-based test-ordering physicians are being drawn into the middle of the conflict. It looks like everyone will come out of this very pissed off, including the hospital labs that have "no dog in this fight." Here are some of the details from a recent story in a Florida newspaper (see: Out-of-network lab? Pay $50):

Doctors who deal with United Healthcare soon may be taking a financial hit if they send patients to an out-of-network lab. In January, United, which has 2.1-million members in Florida and about 800,000 in the Tampa Bay area, ended its contract with Quest Diagnostics ...and signed an exclusive national agreement with Laboratory Corp. of America Holdings ....To enforce the change, the insurer has taken the unusual step of threatening doctors with a $50 fine if they refer United's members to Quest. The penalty takes effect March 1....A United spokesman said doctors have had 90 days since the end of the Quest contract to get used to the change...."In those instances where people go out of network, the costs tend to be higher [said a UnitedHealth spokesman]." [He] said that most doctors have no problem referring within the network and that the fine is expected to be applied "only in rare circumstances."...[A Florida physician] said doctors generally don't have a preference about which lab their patients' use for tests....But convenience is definitely an issue for patients, said [the physician] who shares an office building with a Quest lab. "The insurer allows a patient to have out-of-network benefits. But if they use them, they punish the docs. That doesn't make sense."

Here are some of my reactions that have been spawned by this story :

• First of all, this threatened fine for physicians could be merely scare tactics on the part of UnitedHealth to force the physicians to change their office routines and begin to send their specimens to LabCorp. Once the physicians have changed their office procedures regarding specimen routing, the battle may have been largely won. Note that the LabCorp spokesman suggests that the fine will be rare, which is probably correct, That is to say, they may have little intention of levying it at all.
• The general thrust of the article is that lab services are generally interchangeable and equal and that only the location and convenience of the patient service center is of paramount importance. The story thus continues to telegraph the message that lab testing is a commodity and that all test results are of equal quality, which I do not believe is true.
• Finally, I was surprised that UnitedHealth was ready and wiling to badger their prime customers, physicians, in such an uncivil way. This controversy illustrates that the physicians are just another cog in a larger system and that a major payer is not hesitant to turn up the heat on them. It's no wonder that so many office-based physicians are frustrated with their professional lives.