REGULATING THE FINANCIAL INCENTIVES FACING PHYSICIANS IN MANAGED CAREPLANS

Recent accounts of enrollees in managed care plans being denied access to potentially lifesaving services have heightened public anxiety abo ut the impact of managed care on the accessibility and appropriateness of care, and this anxiety has been translated into legislative action . The present review focuses on an area of managed care operations tha t has received considerable attention in state legislatures and in Con gress during the past 2 years: the financial relationship between mana ged care health plans and physicians. Twelve states now mandate that m anaged care plans disclose information about their financial relations hip with physicians, and 11 states regulate the method used by managed care health plans to compensate physicians. Most laws that regulate m ethods of compensation prohibit health plans from providing physicians an inducement to reduce or limit the delivery of ''medically necessar y'' services. Moreover, in 1996 the Health Care Financing Administrati on finalized its regulations governing the financial incentives facing physicians in plans that treat Medicaid or Medicare patients, and the se regulations went into effect on January 1, 1997. These regulations also are examined in this study.