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.
