WHAT IS THE MESSENGER MODEL? Introduction There is a great deal of confusion over the so-called “messenger model” as outlined in the 1996 Department of Justice/Federal Trade Commission Statements of Antitrust Enforcement Policy in Health Care (1996 Statements). Some physicians incorrectly believe that the “messenger model” permits independent, self-employed physicians to jointly negotiate price and price-related terms with health plans. When the 1996 Statements were issued, “the messenger model” was initially praised as an important expansion in the ability of physicians to level the playing field with health plans. The “messenger model” allows independent, self-employed physicians to jointly market themselves as a network. However, the “messenger model” does not give selfemployed physicians the ability to collectively negotiate fees with health plans or otherwise agree on what fee schedule they collectively will accept. Because of this, and because of the strict limits inherent in the “messenger model,” it has proved of limited usefulness in accomplishing the goals of many physicians. In fact, the Federal Trade Commission has been aggressive in cracking down on alleged misuse of the “messenger model.” The Messenger Model Process In contrast to a joint negotiation, the “messenger model” is a process whereby physicians use a common messenger to convey information on fees and fee-related terms that an individual physician is willing to accept. This is done by having a messenger manage a process whereby each of the physicians in the network arrive at individual agreements with the payer. It is not a process for joint negotiations of fees. When the 1996 Statements were issued, it was made clear that the process outlined in the Statements must be strictly adhered to in order to conform to the antitrust laws. The 1996 Statements do not set forth a specific organizational structure for the “messenger model.” Instead they set forth a process. There are no special requirements for selecting a messenger. But clearly physicians must create a business structure and appoint a “messenger” to begin the process. The “messenger model” process works as follows: • The messenger communicates with each physician individually about what fee range the physician is willing to accept.
February 2004 AMA Private Sector Advocacy
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Each physician may give the messenger the prices and other terms that the individual physician is willing to accept. The messenger then aggregates the information obtained from each individual physician. In doing so, the messenger may develop a schedule showing what percentage of physicians in the network would accept offers at various fee levels. However, the messenger may not share this information with any of the physicians. After aggregating the data, the messenger presents the schedules to payers. Any payer may then make an offer to the physicians in the network. The offer is most likely to be in the form of a fee schedule. The messenger may accept the offer on behalf of any physician who has given the messenger authority to accept offers within the fee range offered by the payer. The messenger may also accept offers on behalf of any physician that are better than any offers previously accepted by that physician. However, the messenger may not engage in any negotiations with the payer on behalf of an individual physician or the physicians collectively. Any offer that is not within the fee range authorized by a physician must be forwarded to that physician for acceptance or rejection. The messenger may provide objective information to physicians in the network about a contract offer made by a payer, such as the meaning of terms and how the offer compares to offers made by other payers. However, the messenger may not give advice about whether to accept the offer or not, and physicians in the network may not communicate with each other about whether to accept a given offer or not. The messenger may not, directly or indirectly, lead or facilitate a boycott of a payer that is designed to influence the terms of the payer’s offer. After establishing whether a physician will accept the offer, the messenger then communicates that back to the payer.
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• Conclusion
There is a general consensus among antitrust lawyers that the “messenger model” has been a failure. It is a cumbersome, ineffective process. Early on, physicians who pursued the “messenger model” quickly learned that it was costly to develop and administer and that health plans were not interested in participating in a “messenger model” process.
January 2004 AMA Private Sector Advocacy
3 Antitrust reform to “level the playing field” between physicians and health plans is a top priority for the AMA. However, until we achieve that goal or achieve comparable regulatory reform, physicians who seek business strategies to permit joint fee negotiation need to focus on moving towards some degree of financial or clinical integration. The AMA is developing resources for physicians on financial and clinical integration.
January 2004 AMA Private Sector Advocacy