Illinois Blues accused of downcoding

Physicians say they've been underpaid $2 million since 2000.

By Mike Norbut — Posted Oct. 10, 2005

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Four surgery centers in central Illinois and their physician investors sued BlueCross BlueShield of Illinois in September, accusing the insurer of arbitrarily rejecting, bundling and downcoding claims.

The case is similar to the class-action case filed in Miami involving 700,000 doctors and the nation's largest insurers. But it is different from the racketeering accusations in the federal case: The Illinois physicians are suing on behalf of patients, who assigned them "all benefits due ... for services provided and claims and causes of action for the collection of said benefits."

"We've taken what we believe is a unique position," said Thomas Pliura, MD, an attorney in LeRoy, Ill., representing the surgery centers and physicians.

The advantage of this strategy is that the physicians do not have to sue their patients, Dr. Pliura said. Without using this approach, the insurer would argue that the patient is ultimately responsible for an unpaid bill.

The lawsuit, filed in the Urbana Division of U.S. District Court for the Central District of Illinois, also names the BlueCross BlueShield Assn.

In addition to the payment claims, the lawsuit accuses the Blues of defamation, saying the insurer falsely told a patient that a surgery center and anesthesia group were not licensed. The lawsuit alleges that the insurer attempted to steer PPO patients away from the plaintiffs "and to its preferred providers."

"The patient pays a higher premium for the option of choice, but Blue Cross is going behind their backs and trying to get them to go to contracted providers," Dr. Pliura said.

The lawsuit seeks a minimum of $50,000 for each of the grievances in the complaint, although Dr. Pliura said that figure was just to satisfy minimum court requirements.

The surgery centers and physicians actually estimate their losses from denied and downcoded claims dating back to 2000 to be some $2 million, he said.

Representatives for the BlueCross BlueShield of Illinois and the BlueCross BlueShield Assn. declined to comment because they had not seen the lawsuit.

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