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DOBI Issues Clarification on Retainer Medicine Arrangements by Network Physicians

April 27, 2012 | No Comments
Posted by Sharlene Hunt

In 2003, the Department of Banking and Insurance (“DOBI”) and the Department of Health and Senior Services (“DHSS”) issued a joint bulletin, DOBI/DHSS Bulletin 2003-02 , which severely limited the ability of physicians who participated with HMOs and other carriers, to require their patients to enter into retainer arrangements.  Under a retainer arrangement, patients are required to pay a fee in addition to any copays or other amounts due under their managed care program, in order to receive services in addition to those provided under the managed care plan.  DOBI has recently issued a bulletin clarifying in part and rescinding in part the earlier DOBI/DHSS bulletin.

The 2003 bulletin concluded that retainer agreements under which covered beneficiaries are required to pay a fee in addition to any cost sharing under their health benefits plan, was not acceptable.  The Departments took the position that many of the services provided under such retainer arrangements were already required under New Jersey law to be covered under most health benefit plans.  The Departments also found that retainer arrangements were inconsistent with the requirement under New Jersey law that all provider agreements assure that in network providers do not discriminate in the treatment of covered beneficiaries.  The Departments found that requiring a covered beneficiary to enter into a retainer contract was not acceptable when the physician participated in the beneficiary’s network, regardless of whether the services covered under the retainer contract supplemented or duplicated the services already covered under the health benefits plan.

In Bulletin No. 12-02, DOBI concludes that “some mutually beneficial arrangements between patients and doctors have been hindered” by the 2003 bulletin.  However, DOBI also stressed that a patient who enters into a retainer agreement with a network physician must continue to be able to receive the full benefit of their health benefit plan and not have to pay extra for already covered services.  DOBI concluded that retainer arrangements offered by in network physicians will not be considered a discriminatory practice if the following four safeguards are put in place:

  • the participating provider agreement should provide that members cannot be charged in excess of their cost sharing obligations under the health benefits plan.  Any retainer agreement requiring an additional payment must be limited to services above and beyond the services covered under the plan, and those additional services must be clearly described by the physician to the patient.
  • Health benefit plan members must have an unfettered right to an adequate network of participating providers who have not limited their practice by restricting patients to those who will enter into retainer agreements.  Health plans are directed not to include physicians who limit their practices to patients willing to enter into retainer agreements for purposes of establishing network adequacy.
  • Plan materials available to members listing network providers should not include practices that are limited to patients buying retainer services unless they are identified as such.  Such physicians can either be excluded from the materials or the listing can include the retainer limitation.
  • If a patient is already receiving services from a physician when the physician converts to a retainer practice, the patient must be entitled to all of the rights of a patient whose physician drops out of network.  This includes the right to continue to receive care for periods set forth in regulatory requirements, without making any retainer payments.

Finally, DOBI recognizes that a physician may limit the number of patients the physician will accept in order to provide the enhanced level of care required under a retainer arrangement.  Such limitations will not be considered discriminatory, even if the practice is closed to other patients, so long as the above requirements have been met.  Health benefit plans are not required to allow their network providers to limit their practices by retainer agreements, but are allowed to do so so long as the requirements of the bulletin are met.


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