- 13 -
Petitioner determined that, from 1985 to April 1994, its fee
schedule produced payments to primary care physicians that were
20 percent below mid-market rates. For all physician services,
petitioner calculated that its fee schedule represented a
discount (relative to the amount billed) of approximately 14
percent in 1993, 20 percent in 1994, 28 percent in 1995, and 33
percent in 1996.
Between 1985 and 1995, petitioner withheld between 10 and 20
percent of its payments to physicians, unless the physicians
achieved certain budgetary savings. In 1996, petitioner
discontinued withholding payments to physicians.
Prior to April 1996, petitioner made incentive payments to
physicians who controlled expenses and reduced the cost of
providing health care services to petitioner’s enrollees.
Eligible physicians received incentive payments for years in
which petitioner’s actual health care costs were less than its
projected costs.
Approximately 21 percent of petitioner’s expenditures for
physician services was attributable to services provided by
physicians employed by Health Services. The remaining 79 percent
of such expenditures was attributable to services provided by
independent physicians.
Petitioner fulfilled its obligation to arrange for its
enrollees to receive hospital services by contracting with a
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011