Sixteen states have enacted laws this year prohibiting so-called "gag" clauses in managed care contracts, and more states are considering similar legislation.

"The fact that so many states have enacted legislation in one year to curtail gag clauses is dramatic testimony to the effectiveness of organized medicine," commented Katherine Becker, an assistant director in the Division of Government Relations (DGR). "This will help ensure that patients' rights and physicians' responsibilities to those patients will not be undermined by arbitrary managed care practices."

The states should bar health insurers from contractually or otherwise restricting physicians' freedom to discuss all aspects of a patient's medical needs, according to a recent DGR advocacy document titled "Talking Points on Gag Rules."

Massachusetts was the first state to enact a law barring gag clauses in managed care contracts

(Psychiatric News, March 15). The Massachusetts Psychiatric Society joined a coalition of mental health professionals and the state medical society to lobby for the bill's passage, which occurred in January.

Also passing laws prohibiting gag rules this year are California, Colorado, Delaware, Georgia, Indiana, Maine, Maryland, New Hampshire, New York, Pennsylvania, Rhose Island, Tennessee, Vermont, Virginia, and Washington. APA's district branches in these states have supported the lobbying efforts of the medical societies, noted Becker.

Oklahoma's Board of Health decided to enforce the same policy through licensing of HMO's, and the New Jersey Health Department has proposed similar rules, according to a September 17 article in the New York Times.

Several other states considered "gag rule" bills this year, and more action is expected in the next legislative session, according to DGR.

The goal driving the legislation is protecting doctor-patient health care communication including treatment options, referrals, specialists' recommendations, second opinions, providers' financial incentives to limit care, and plan payment policies.

"Informed consent by patients is undermined when physicians are unable to disclose all medical issues relevant to the patient's health needs," according to the DGR document.

Furthermore, such clauses interfere with the physicians' ethical obligation to act in the best interests of their patients. The DGR document refers to the AMA's Code of Ethics, which states in part that "the physician's obligation to disclose treatment alternatives to patients is not altered by any limitations in the coverage provided by the patient's managed care plan. . . ."

The new laws should also decrease physicians' risk of liability associated with gag clauses, according to Nancy Wheeler, an attorney with Crowell and Moring and coordinator of the APA-sponsored Legal Consultation Plan. She explained to Psychiatric News, "Physicians can be held liable under the doctrine of negligence if they don't recommend certain treatment options, for example. They can be seen as delivering a substandard of care."

Moreover, if patients are not fully informed about their treatment options, the physician could be held liable under the doctrine of informed consent, added Wheeler.

Another benefit of the new legislation is that psychiatrists who encounter a gag clause "have more bargaining power to say this is not allowed and it needs to come out," said Wheeler.

Nonetheless, gag clauses can be difficult to recognize in managed care contracts because they are not labeled as such, and "some may have subtle language tied in with divulging trade secrets or other proprietary issues, which the new state laws do not prohibit," said Wheeler.

The managed care company and the psychiatrist may also disagree as to what represents a gag clause, added Wheeler.

To assist APA members with the ethical and legal implications of gag rules, APA's Board of Trustees voted in September to ask the APA Ethics and Managed Care committees to define and propose an ethical position on psychiatrists' signing or being bound by such clauses. The Board also approved asking the Psychiatrists' Purchasing Group to assess the impact of gag rules on the liability risks to APA members and rate the risks for them.

Another resource available to APA members is the Legal Consultation Plan. More details are available from Robert Palmer in APA's Office of Membership at (202) 682-6064.

(Psychiatric News, October 18, 1996)