Alabama doctors file complaints against state Blues plan

Physicians say the insurer has failed to follow the pay policies and other terms of a class-action settlement.

By Emily Berry — Posted Nov. 23, 2009

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The Medical Assn. of the State of Alabama and more than 20 specialty physician organizations and physician practices have filed formal complaints that Blue Cross and Blue Shield of Alabama has not followed the terms of a class-action litigation settlement.

Deborah Winegard, an Atlanta attorney who serves as class compliance dispute facilitator for the settlement, said she is evaluating the filings, made between September and November.

The 2007 settlement of the case, Love et al. v. Blue Cross and Blue Shield Assn. et al., was finalized when the last appeal was rejected in June, though some provisions took effect before then.

The settlement over payment practices involved the BlueCross BlueShield Assn. and 30 affiliated plans, including Alabama. In July, $131 million of settlement claims were mailed to physicians who had filed claims by Oct. 19, 2007. The Love case was one of a series of lawsuits filed by physicians against health plans that were settled in U.S. District Court in Miami. None of the plans admitted wrongdoing.

What the physicians say

In their compliance dispute filings, physicians claim the Alabama Blues:

  • Failed to give doctors sufficient notice of substantial changes it had planned for its fee schedule in the coming months. The company initially planned to roll out new payment rates and rules starting Dec. 1. (The company announced Nov. 3 that it would delay implementing changes until no later than July 2010.)
  • Never formed a specialty physicians' advisory committee required by the settlement agreement.
  • Has not paid for claims that included Current Procedural Terminology modifiers 25 and 59.

The plan was allowed to exempt a limited number of coding combinations with the 25 and 59 modifiers and list those online, but instead listed essentially all possible combinations, doctors claim.

Not every dispute filed included all three major complaints, but all included one or more of those elements, Winegard said.

She said her initial review of the complaints indicate they are well-founded. "It is my job first to look at compliance disputes when they come in and determine whether they actually are valid disputes," Winegard said. "This clearly is."

Alabama Blues spokeswoman Koko Mackin said the company is aware of the complaints. But Mackin added that she had not seen them and thus could not address the specific allegations.

"We have been complying with the Love settlement, adhering to the terms of that settlement since it was approved by the court in [April] 2007," Mackin said.

Winegard said she will try to work out a solution informally with the Alabama Blues. If that fails, the matter will go before a court-approved compliance dispute officer.

Even if the physicians prevail, it won't necessarily fix some of the problems with the new fee schedule, said Jorge Alsip, MD, an emergency physician who practices in Daphne, Ala.

"We realize that at the end of the day Blue Cross can still make the same changes," he said. "They could restart the clock, have this committee, and say, 'Here are the changes we're making; you may not like it.' "

According to the American Medical Association's most recent report tracking insurance company market share, the Alabama Blues plan holds 89% of the combined market for PPO and HMO insurance.

That makes the Alabama Blues the most dominant single-state health insurer among the states in the report.

The Alabama Blues is not the first plan to be a subject of complaints under the settlement. In August, a mediator ruled that Independence Blue Cross of Pennsylvania was in violation when it tried to collect what the plan called overpayments to surgeons. The mediator said Independence could not collect payments made to physicians before October 2007.

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