A common HMO ploy is to ask a provider to sign a contract agreeing to a significant reimbursement discount for the enrollees of the HMO and its affiliates. The HMO then goes to self-insured employers, who would normally pay the providers' full charges, and offers claims administration services to those employers. The HMOs then pay the providers the HMO rate, but bill full charges to the self-insured employers.
A silent PPO is a contracting entity that negotiates discounts with providers but sells access to the discounts to other, non related parties after services are provided to individuals covered by the non related parties' insurance policies. HMO contracts usually contain so-called 'all-product clauses' which permit these abuses. All-products clauses in health insurer contracts were banned by Nevada's insurance commissioner last fall, and Illinois, North Dakota and Texas have bills in their legislatures to prohibit such clauses.
An 1800-Physician IPA in Kentucky recently terminated its contract with Aetna U.S. Healthcare over this issue. The Physicians Inc., an IPA in Louisville, terminated its Aetna group contract rather than agree to an all-product clause, which would require the physicians to participate in all of the managed care plans offered by Aetna in their market.
The U.S. Supreme Court recently approved a class action for treble damages under RICO for concealing discounts. Justice Ruth Bader Ginsberg, writing for the court, said Congress, in the McCarran-Ferguson Act, never "intended to cede the field of insurance regulation to the States."