A recent article in www.
workcompcenral.com
California -- Suit Charges Price Fixing
by Blue Cross and State Fund
A group of California doctors announced Friday that they
are seeking
class-action status for a lawsuit that accuses State Compensation
Insurance Fund and Blue Cross of California of price fixing by forcing
physicians to accept discounted rates for workers' compensation patients.
The suit, filed by attorney Maxwell Blecher in Los Angeles
County
Superior Court, charges that both the state's largest workers'
compensation insurer and the largest health care provider collaborated
to keep payments artificially low by forcing physicians to join State
Fund's medical provider network, which is administered by Blue Cross.
"The actions of (Blue Cross) and its 'affiliates' constitute
price
fixing," the complaint charges. "By locking tens of thousands
of
California physicians into a provider network and using their
overwhelming market power to extract below cost prices, defendants have
created a tremendous barrier for competing provider networks to furnish
medical services to WC patients."
The plaintiffs are Dr. Jan E. Henstorf of Fremont; Dr. James
Kayvanfar
of Newhall; California Orthopaedics Institute Medical Associates in San
Diego; Dr. Charles T. Resnick of La Canada, and Dr. James S. Manion of
Cathedral City. The suit also seeks damages for similarly situated
physicians who are not yet named.
The suit names Blue Cross corporate parent Wellpoint Health
Networks as
a co-defendant with State Fund.
Both Wellpoint and State Fund refused to comment Friday,
saying they had
not been served with the complaint.
Diane Przepiorski, executive director of the California
Orthopaedic
Association, said she is familiar with some of the plaintiffs. She said
their concerns are echoed by many other physicians who think it is
unfair that Blue Cross requires them to see workers' compensation
patients at discounted rates as a condition of continuing to participate
in Blue Cross' group health plan. She said in many areas of California,
State Fund is the dominant workers' compensation carrier and Blue Cross
is the dominant group health insurer, so doctors had no choice but to
participate in the medical provider network if they wanted to stay in
practice.
Rather than reimburse physicians according to the Official
Medical Fee
Schedule, Blue Cross of California (BCC) and Wellpoint Health Services
paid doctors deeply discounted rates under the group's Prudent Buyer
Rate program, the lawsuit alleges.
"BCC, as the operator of the largest preferred provider
network in
California, has substantial market power. BCC exercises that power by,
among other matters, reimbursing participating physicians at deeply
discounted rates ... for medical services furnished to commercial
patients," Blecher said.
The complaint seeks damages under California Antitrust Laws
and an order
to State Fund and Wellpoint halting the alleged unlawful conduct.
Susan Gard, spokeswoman for the California Division of Workers'
Compensation, said that an alternate fee arrangement between payer and
provider is permissible under labor law section 5307.11.
"The question is whether the doctors are under contract
with Blue Cross
because if they are, the contract trumps the fee schedule," Gard
said.
The code section reads, in part: "When a health care
provider or health
facility licensed pursuant to Section 1250 of the Health and Safety
Code, and a contracting agent, employer, or carrier contract for
reimbursement rates different from those in the fee schedule, the
medical fee schedule for that health care provider or health facility
licensed pursuant to Section 1250 of the Health and Safety Code shall
not apply to the contracted reimbursement rates."
The dispute between treating doctors and Blue Cross California
surfaced
last year. Assemblywoman Fran Pavley, D-Agoura Hills, introduced a bill
on behalf of the California Medical Association that would have forced
health care companies to allow their doctors under group-health
contracts to opt out of workers' compensation medical provider networks.
The bill died in committee.
The medical association eventually reached a settlement
with Wellpoint
to allow Blue Cross physicians to decide whether to remain a part of
Blue Cross California's Prudent Buyer network.
Blecher is a partner in the downtown Los Angeles firm Blecher
& Collins.
Blecher specializes in antitrust litigation cases and successfully sued
the National Football League on behalf of the Oakland Raiders for the
right to move the team to Southern California in 1982.
--By Rob McCarthy, WorkCompCentral Editor
rob@workcompcentral.com
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