Termination of a physician contract: fair procedure under Potvin v. Metropolitan Life.
In Potvin v. Metropolitan Life Insurance Co., the California Supreme Court held that a physician provider who is an independent contractor for a health insurer may have a right to fair procedure before being terminated. The provider would have such a right only if the health insurer possesses substantial power such that the insurer's termination of the provider impairs the provider's ability to practice medicine. If the insurer does possess substantial power, then the decision to exclude or terminate the provider would have to be substantively rational and procedurally fair. This right to fair procedure cannot be waived or modified by a termination-without-cause provision in the contract. The Potvin decision does not clarify whether this obligation applies to entities other than health insurers, or to decisions other than those involving termination or exclusion.
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Sonnenschein Nath & Rosenthal, Los Angeles, USA.
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D002140:California; D002961:Civil Rights / Q000331:legislation & jurisprudence*; D003284:Contract Services / Q000331:legislation & jurisprudence*; D017408:Guidelines as Topic; D007343:Insurance Carriers / Q000331:legislation & jurisprudence*; D010820:Physicians / Q000331:legislation & jurisprudence*; D011243:Preferred Provider Organizations / Q000331:legislation & jurisprudence*