Phyamerica will never die....

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bcrosspac

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Has anyone seen this latest excerpt from "Common Sense" by AAEM. This is a VERY scary situation that can happen to any of us. Once again, a powerful argument against trusting our livelihood to corporate emergency medicine. I urge everyone to read it, join AAEM if you are not a member already and vote for Quinn and I.

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This is indeed scary. But is the situation primarily due to the practice of corporate medicine or to the malpractice crisis in general? If a private insurer of EPs in inependent groups went bankrupt wouldn't the result be the same?
 
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In this case, it appears that Phyamerica misled it's ED docs by operating as a self insured entity rather that with an outside insurance company. Unfortunately, the CEO of Phyamerica has a track record of this sort of unethical business practices. One need look no further than the debacle last year when Phyamerica was bought by Sterling and then the CEO (will not name him due to posting rules) stole the biggest contract away completely against the contract (North Broward Hospital District). I am sure you can find some of the details on Google.
 
I have been following this in the AAEM newletters and emails as well.

There are scary times to be practicing our profession.

It is sad that we as physicians have neglected our opportunity and obligation to be involved in the political process for so long, to the detriment of our practices and our patients.

At least we have AAEM looking out for us, because there do not seem to be many other loud voices advocating on our behalf. The AAEM/RES dues are the one check I actually look forward to signing this year.
 
There are several reasons why this is a problem of a corporate group and is unlikely to become a problem from a democratic group.

The CMG has enough size that they can create their own insurance subsidiary. Very few private groups can do this. PhyAmerica did not properly fund their insurance subsidiary...actually they underfunded it by around 90+%.
So, over 200 docs are now in a situation where they have open claims against them and the insurance subsidiary will go bankrupt after one or two large judgments. All the other docs are potentially liable for their personal assets for settlements or jury verdicts, and may have to pay legal fees (lots of money) out of their pocket. They are being pressured to settle frivolous lawsuits to make the problem go away, but this will make it more difficult and expensive for them to get medmal insurance in the future.

If a democratic group were large enough to create its own insurance subsidiary, they would not choose to way underfund it, because the physician-owners would be screwing themselves. But, the CMG executives (and shareholders in certain firms) do not have any disincentive to screw their physician-employees in terms of medmal. In this case, dozens of physician-employees wrote letters to Phyamerica and the insurance subsidiary and were assured that the insurance subsidiary was fully funded, which of course was not true. but then again, this is the same group of people that gave themselves several hundred thousand dollar bonuses a few days before they declared bankruptcy.

The physician-employees couldn't have done anything to prevent their situation except for not working for PhyAmerica. Since they have no real access to the insurance info earlier, they couldn't have known how they were getting screwed. Remember, physicians working for CMGS, can't even see what is billed in their own name, despite being on the hook for any overbilling by the CMG. Compare this to a democratic gorup, where everyone can see the books and everyone has a vote in the decision for how to take care of these management and financial issues.

AAEM is expending significant resources to help out these PhyAmerica (now Sterling) docs. In addition, the entire AAEM Board has volunteered to serve as an expert witness, free of charge, for any of these 200+ pending cases. Of course, AAEM continues to work to prevent these abuses from even happening.

Read more at www.aaem.org, www.aaemres.org, and in Common Sense.
I'll write up a synopsis on the issue sometime this month and post it under AAEM Topics on the AAEM Discussion Forums.

Take care,
Mark Reiter MD MBA
UNC EM
President-Elect, AAEM Resident and Student Association
 
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