Laws that Limit Providers and Limit Patient Choice May Have Limited Effects

Research on the effects of any-willing-provider laws

From 1996 to 1998, researchers at the University of Alabama studied the effect of any willing provider (AWP) and freedom of choice (FOC) laws on Health Maintenance Organizations (HMOs) and employers.

AWP laws require that any provider willing to accept the terms and conditions of a contract with a managed care organization must be allowed into the managed care network. FOC laws require managed care firms to allow subscribers to use non-participating health care providers for a larger out-of-pocket payment.

These laws had been enacted in more than 25 states by the mid-1990s.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO).

Key Findings

  • The researchers found that AWP and FOC laws are typically enacted in states with little managed care activity, suggesting that states adopt them proactively as a tool to curb managed care growth.

  • The researchers found that AWP and FOC laws are typically enacted in states with little managed care activity, suggesting that states adopt them proactively as a tool to curb managed care growth.

  • In fact, the results showed that AWP laws pertaining to physicians reduced HMO penetration.

  • In addition, AWP laws pertaining to hospitals significantly increased HMO administrative costs.

  • The laws, however, do not appear to have decreased the number or type of managed care plans offered by employers or increased the premiums employers pay for these plans.

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