Alabama Blues overhauls physician fee schedule

Doctors worry about a potential drop in pay but say they have limited leverage because of the plan's market dominance.

By Emily Berry — Posted Oct. 13, 2009

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BlueCross BlueShield of Alabama is overhauling the way it pays physicians, moving from a "homegrown" fee schedule to one based on the resource-based relative value scale, or RBRVS.

The changes could end up reducing income for as many as 40% of physicians across the state, according to doctors' early estimates. But they say there is little they can do to protest, because the plan has such dominant market share.

According to the AMA's most recent analysis of insurance company market share, Alabama Blues' plan holds 89% of the combined market for PPO and HMO health insurance, making it the most dominant plan in any of the states for which market data is available.

"If you're going to practice in Alabama and be a viable practice, you're going to have to take Blue Cross," said Jorge Alsip, MD, an emergency physician who practices in Daphne, Ala., and is president of the Medical Assn. of the State of Alabama.

Based on what the plan has told the medical association, the changes appear most likely to benefit primary care physicians, because evaluation and management codes will be better reimbursed as pay for many procedures will drop, Dr. Alsip said.

The association has long advocated better pay for primary care, citing difficulties recruiting primary care doctors, but also believed those improvements shouldn't come at the expense of specialists, Dr. Alsip said.

For its part, the plan claims the switch to an RBRVS-based fee schedule won't save money and cost-cutting wasn't the motivation for the changes.

The adjustments were prompted both by the plan's settlement of class-action litigation and by the plan's own assessment of its decades-old fee schedule, said company spokeswoman Koko Mackin.

"When you look out there, 80% of payers are using a nationally recognized fee schedule," she said. "We found ourselves somewhat in the minority."

Starting Dec. 1, the plan will begin a gradual transition to the new fee schedule, Mackin said.

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