Public Policy Claims
Most states have some kind of doctrine to prevent employers from firing employees or terminating contractors when doing so would violate public policy. This includes any firings that would violate other statutes, such as the civil rights laws. It also includes situations where the employee was fired for trying to prevent the employer from breaking the law or endangering the public health. The protections are generally very limited and few employees can establish the facts necessary to use them. Some physicians have used this doctrine to attack deselection that is based on refusing to do cost-cutting that the physicians believe would injure patients, or when the plan just cuts the most expensive physicians, with no efforts to determine if their expenditures were valid.
To date, there has only been one successful case, Harper v. Healthsource. [Harper v. Healthsource N.H., Inc., 674 A.2d 962 (N.H. 1996).] Dr. Harper alleged that he was terminated because the plan resisted his efforts to provide proper patient care. The court found that New Hampshire did not allow terminations that violated public policy, and that various state regulations established that there was a policy protecting the health of MCO patients. The court held the following:
Harper is entitled to proceed upon the merits of his claim that Healthsource’s decision to terminate its relationship with him was made in bad faith or violated public policy. In his petition, he asserted that his efforts to correct errors made in patient records played a role in Healthsource’s decision, and he argues on appeal that public policy should condemn “an insurance company which, upon receipt of a letter from a medical provider asking for assistance in correcting ... records of patient treatments, terminates the doctor’s services.” [ Id. at 967.]
Subsequent courts have not adopted Harper, limiting it to the special circumstances of New Hampshire law.14 In the absence of specific state laws or regulations, there are few limits on the rights of MCOs to terminate physicians’ contracts without judicial review. At this time, a physician’s only protection will have to be in the terms of the contract with the MCO and any due process that is provided as part of that contract. There are many legal challenges to the unfettered power of MCOs in progress, however it is likely that public concern with the quality of MCO care will force changes in this area.