Question

In: Operations Management

Rural County has a population of 15,000, a small primary carehospital, and tenphysicians, including...

Rural County has a population of 15,000, a small primary care hospital, and ten
physicians, including seven general and family practitioners, an obstetrician, a pediatrician,
and a general surgeon. All the physicians are solo practitioners. The nearest urban area is
about 60 miles away in Big City, which has a population of 300,000, and three major
hospitals to which patients from Rural County are referred or transferred for higher levels
of hospital care. However, Big City is too far away for most residents of Rural County to
use for services available in Rural County.
Insurance Company, which operates throughout the state, is attempting to offer
“managed care” programs in all areas of the state, and has asked the local physicians in
Rural County to form an IPA to provide services under the program to covered persons
living in the county. No other managed care plan has attempted to enter the county
previously.
Initially, two of the general practitioners and two of the specialists express interest in
forming a network, but Insurance Company says that it intends to market its plan to the
larger local employers, who need broader geographic and specialty coverage for their
employees. Consequently, Insurance Company needs more of the local general practitioners
and the one remaining specialist in the IPA in order to provide adequate geographic,
specialty, and backup coverage to subscribers in Rural County. Eventually, four of the
seven general practitioners and the one remaining specialist join the IPA and agree to
provide services to Insurance Company’s subscribers under contracts providing for
capitation. While the physicians’ participation in the IPA is structured to be nonexclusive,
no other managed care plan has yet entered the local market or approached any of the
physicians about joining a different provider panel. In discussing the formation of the IPA
with the Insurance Company, a number of the physicians have made clear their intention
to continue to practice outside the IPA and have indicated they would be interested in
contracting individually with other managed care plans when those plans expand into Rural
County. Insurance Company requests your legal advice about whether this network
formation is likely to be challenged by the federal government.

Discuss whether the network described in the Problem would likely be challenged by the federal government.

  • Why? On what legal basis?

  • What would be your response to a challenge?

  • Would factors increase or decrease your changes of a federal challenge?

Solutions

Expert Solution

1. Indeed, it can be challenged because the people who live there already don't easily get all facilities because the insruance company starts a plan where almost everyone living there will be served. They have already no sufficient facilities and doctors, according to the population, but because of the panel, more problems will arise as only one practitioner will be present. It can therefore be opposed, since the insurance company created this panel, which would represent the entire range of contractor clients, but when we look at the panel in a bigger way it would not be ideal for rural people, it would be bad for them. The insurance company misuses the ability to view medical facilities

2. We may say that the company sees all things and has created a legal council and all the doctors are affiliated if they want, so that they can serve where they want not to work here only. We are all permitted to work outside and some professionals have already advised us that they could pass on to this panel from this company to a panel that has also been decided in advance to satisfy our current customers, as we must provide these services under our contract, and we do likewise to meet the requirements of the panel's contract. We didn't obligate any of the doctors to join us, so we gave them good contracts. So we began our panel here. That's going to start on 10 September.

3. Factors whch will increase our federal challenge -in our favour are as follows: We created a panel to service our customers-we created this panel to serve customers for stuff we have offered them, since we are obligated to do so and when they welcomed these experts, they embraced our offer and we formed this panel and soon we will start our work. It is our mission to provide our consumers with the best alternative. We have formed this panel to defend our employers ' workers because they want to give their employees the best possible service. People that enter on their own wishes- all members of the team were encouraged to support the proposal whoever has accepted the application here with us; we did not force anyone to participate or offer some sort of bribe we had our legal contract and if someone chooses, they may be cancelled according to their intention, etc.

Chaellenge does not take our advantage of the diminishing prospects causes : Every rural coutry is now only provided one or two doctors, and the condition for the federal government is very complicated. There is one person who can go everywhere at one time. There will be so many lives on stake, and federal doctors have to prepare for them to meet minimum requirements in the region. You can easily go out to the city in order to check it out, so for the countrymen it will be very difficult to check it out. The fundamental rights of individuals and the main duties of employers are a federal responsibility to provide for their entire population, not only in the region but to provide basic medical services. Thus the federal government will sue the unknown business because it threatens the country's federal facilities. The essential part of any country, which is health and health.


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