AA: A group of physicians, three or more without a cap either by specialty or geographic area, will be able to obtain an application from the attorney general’s office and submit that application with the details of the issues that that physician group would like to negotiate with a given managed care organization. I’m sure there’s going to be a fee involved, which we would like to see set high enough so that it doesn’t flood the attorney general’s office with applications—it should be a fee that’s realistic but not prohibitive. The attorney general and his staff would review the application and render an opinion as to whether he would allow those issues, whether they be economic or non-economic, to be negotiated under his auspices with a particular managed care organization. The managed care organization would then be made aware of the request, review it and decide whether or not they would wish to enter into negotiations with the physician group.

AA: We feel it’s probably the strongest law in the country, there being only two others. The Washington state law does not permit negotiation on economic issues, so fees are out. The law in Texas was fairly hastily put together and it was confusing, from what I’m told. But the single biggest feature about it that we were to able to avoid was the cap on physician participation. In the Texas law, no more than ten percent of a given specialty or ten percent of the physicians in a given geographic area could join together and petition the regulatory agency for the ability to jointly negotiate with HMOs. Unfortunately, in none of the states is HMO participation mandatory or binding, which are obvious flaws from a standpoint of the physician. But politics being the art of the doable, it really was very difficult to get the law passed. It took two and a half years of making it our chief legislative priority to get it passed. I don’t think that, if we held out to try to make it binding on the HMOs, that it would have gotten through in the near future. One of the key selling points to the legislature was: what did the HMOs have to lose? If they want to walk away and don’t negotiate, they have that right. We feel that it is still extremely useful because, if sufficient groups get together and petition the attorney general and make their case known—and we strongly feel that individual physician groups can put together persuasive cases to permit joint negotiations—it’s impossible after a while for an HMO to stonewall and refuse to negotiate repeatedly with various groups of physicians when both the physician groups and the attorney general say there’s a reasonable point for negotiation.

In New Jersey the medical society has had a long history of negotiating fairly amicably with various HMOs on broad terms, on patient care issues, on clinical guideline initiatives and things like that. So, the HMOs are very proud and happy to say that they work with the medical profession and they point to that almost as a selling point. We feel it would be very difficult and untenable for them to negotiate with the profession in general and then balk when it comes to negotiating specific terms with specific physician groups. That can happen once or twice, but if it continues to happen, then it becomes obvious that they are being self-serving in their denial. Because there’s no cap by specialty or by geographic area, the fact that we can theoretically get every gastroenterologist or every oncologist in the state to say, "We don’t like the outline that Aetna U.S. Healthcare uses as their clinical guidelines for GI endoscopy and we want to sit down and negotiate that. We don’t feel it’s a reasonable claim to make on our specialty." What are they going to do? It would be very difficult for them to completely deny a large proportion of a specialty when they have to have that specialty in their network in order to deliver comprehensive health care. It forces them to the table.

AA: I don’t believe so. Any logic that would take that into consideration would also have to take into consideration the logic that the HMOs, which are multi-million dollar corporations, are operating in the same marketplace and have no such constraints.

AA: All the physician groups—the Medical Society of New Jersey, a number of specialty groups and the Osteopathic Physician Association in the state of New Jersey—supported it. The Hospital Association was sort of lukewarm on it. The Business and Industry Association, the Chamber of Commerce and employer groups were fed a lot of misinformation by the Association of Health Plans who had people come in from their national counterpart organizations to help fight the battle for them. They spent a tremendous amount of money. They said that this would raise the amount of money employers would pay for health care because premiums would have to go up. There’s no evidence to show that that would be the case. We took the position that, even in non-economic cases, we feel that there’s a tremendous amount of merit in being able to negotiate patient care issues and being able to negotiate the practice of medicine rather than the payment for managed care.

AA: My understanding was that one physician group in Texas was approved for joint negotiations but at that point the HMO said they didn’t want to and walked away. I don’t know how much of a cold water effect that had in dampening the enthusiasm for the physicians in Texas to do that sort of thing. From what I hear, the Texas regulations are somewhat cumbersome and confusing. It becomes a little bit disheartening for physicians to jump through all the hoops it takes to get to the point where you’re allowed to negotiate, then have the other party decide to walk away. We’re trying to avoid that in New Jersey. The state government has been fairly supportive. When the bill was in the New Jersey Senate, it was actually sponsored by Donald DiFrancesco, who then became the acting governor and eventually signed it into law. We had a great deal of interaction with our current governor, Jim McGreevy, during his campaigning and he’s very knowledgeable about medical practice problems, medical markets and the plight of physicians. He has been supportive, both before and after his inauguration. So, we feel that the appropriate people in Trenton are on notice that, now that the bill has passed, we are first in line, so to speak, to try to make it work.

AA: Having the bill passed was basically an enabling move. The next step is that the regulations have to be written out in detail by the new state attorney general, with the application process, the application fee and all those practical details. We’re very optimistic that he will give us a fair shake on this and we have every indication of that. At the same time, while we try to organize and spread the information about what we should be doing as a medical society and as a profession among various groups in the state, we do not want to trample the attorney general and rush him into trying to put something together. We realize he has a lot of things on the front burner other than our own concerns. We take the view that this might take a while to get done, but we’d rather have it done well than done hastily. We have worked in conjunction with a group called PRN, Physicians for Responsible Negotiation, which is the AMA’s joint negotiations arm. They were very happy to see the law passed in New Jersey. They’re very supportive and told us they’ll be with us every step along the way for whatever support and background material that we would need in asking for specifics in the drafting of the regulations. We have some input on that. We would like to have the regulations be fair and equitable. Whatever time frame is necessary for the attorney general—we would like to stay on his good side. We don’t want to push him and pester him about it and we feel he is going to come through for us. To us, that translates to maybe six months to a year, perhaps. That’s not necessarily all bad because, meanwhile, we are trying as a medical society to reach out to our grassroots members and pull together groups so that physicians have an idea of what will be available to them so that, once the door opens officially, we’ll be ready to go with good, clean cases from groups that have done their homework and have viable, meritorious points for negotiation. We don’t just want to have 100 cases waiting on the attorney general’s doorstep and half of them being poorly-built cases.

AA: I have appointed a joint negotiations unit within the medical society to gather together officials and friends of the medical society and some attorneys who have worked for us—a core of people who really know the issues, know what’s going on with the law, know what’s going on in Trenton. We plan on having these folks speak at various hospital staff meetings, county medical society meetings, basically any group of physicians that would care to explore the potential for betterment on the joint negotiations front. We also have people from PRN and the AMA who have told us they will come down and speak to physician groups for us. Basically, we need to be able to cut through any misconceptions that physicians may have and get them up to speed about what is realistic and what isn’t. Let them know the opportunity is going to be there.