Michigan doctors want protection from the Blues

Two state medical societies are suing over allegations that the plan imposed a fee without physicians' consent.

By Robert Kazel — Posted Feb. 7, 2005

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Two Michigan medical associations are asking a state court to prevent Blue Cross Blue Shield of Michigan from retaliating against doctors who refuse to accept changes in fee arrangements that would reduce reimbursements to physicians.

The groups say those changes were imposed without doctors' consent when three United Auto Workers insurance contracts were renegotiated last year.

The motion for a preliminary injunction was filed in Ingham County Circuit Court Jan. 11 by the Michigan State Medical Society, submitted jointly with the Michigan Osteopathic Assn. The court was to hold a hearing Feb. 2 on the preliminary injunction.

The request for an injunction is the most recent chapter in a lawsuit filed by the two medical societies in September 2004. The societies asked the court for a declaratory judgment that physicians are not obligated to go along with new, discounted fees set by the Blues and incorporated into UAW health insurance agreements with DaimlerChrysler AG's Chrysler Group, Ford Motor Co. and General Motors Corp. That request is still pending before the court.

Under the new contracts, automaker employees, relatives and retirees were moved into new plans that the Blues called PPOs but which were not based on contracts between plan sponsors and the doctors' network.

The auto companies are self-insured, and Blue Cross acts as a hired administrator for the network. The lawsuit by the medical societies argues that physicians are not bound by PPO rates if the contracts are for administrative services provided by a managed care company as part of a third-party agreement with the auto companies, and not for health care paid for by the Blues plan itself.

Under the new arrangement, allowable fees for physicians were trimmed by 25% or more, according to MSMS. Some doctors are charging the reduced rates and others are continuing to charge what they did before the Blues acted to change them.

But those who have not adjusted their charges are concerned that the Blues could exclude them from serving patients in its other networks, said Julie Novak, director of medical economics for MSMS. About 18,000 physicians are in the Blues network.

"We understand they're looking for a way to control their costs ... but this way of going about it was [inappropriate]," Novak said.

Helen Stojic, a Michigan Blues spokeswoman, would not comment on whether the plan would seek to exclude any physicians from other networks if they reject the new terms. "We'll have to leave that to the courts."

The position of the medical associations was endorsed by AMA President John C. Nelson, MD, MPH.

Blue Cross "is attempting to circumvent the fair contracting process by dictating one-sided participation and fee schedule terms and attempting to unilaterally amend contracts," Dr. Nelson said in a statement. "These tactics drive a wedge between patients and physicians and will further set back [the company's] relations with Michigan physicians and their patients."

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