American Medical News

Texas slaps $800,000 penalty on Harris Methodist health plan: doctors complained incentives encourages withholding care.

Doctors complained incentives encouraged withholding care

The Texas Insurance Dept. has fined Harris Methodist Texas Health Plan $800,000 for violating a state insurance regulation that prohibits health plans from using financial incentives to encourage doctors to withhold medically necessary care.

Harris Methodist is the first health plan to be penalized for violating that regulation since it went into effect in January 1996, said department spokesperson Mark Hanna. The insurance department began investigating Harris Methodist after receiving numerous complaints from doctors, he said.

Specifically, the department is penalizing the health plan for including clauses in some of its contracts that limited prescription drug costs to 9.6% of each premium dollar. Physician groups that spent less than that received bonuses, while physician groups whose pharmacy costs exceeded that amount were penalized. Those groups that exceeded the target had 35% of the cost overrun withheld from their capitation payments. …

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