They're mad as hell, and their societies aren't taking it anymore.
As giant insurers merge, leaving one or two plans dominating an increasing number of markets, it's becoming more difficult for doctors to oppose their demands. But Michigan physicians have decided to take a stand against Blue Cross Blue Shield of Michigan, which they believe has taken unfair advantage of them. Although this battle is taking place in just one small part of the country, their fight may be your fight before long.
Last year, the Michigan Blues transferred about 250,000 autoworkers and their families from traditional indemnity plans to three new PPOs that are self-insured by General Motors, Ford, and DaimlerChrysler. As a result, many doctors had to lower their office visit fees to these patients by as much as 25 percent. While it's not unheard of for health plans to cut physician reimbursement to this extent, Michigan physicians believe that what the Blues did in this case was deceptive and illegal.
Because the old indemnity plans hadn't covered office visits, physicians had been able to charge their full fees. Blue Cross Blue Shield claims that the new PPOs do cover office visits; but patients in the GM and Ford plans have a 100 percent copayment on office visits, and patients in the DaimlerChrysler PPO have a $5,000 deductible before any visit fees are covered. So, in effect, say doctors, office charges are still not covered, yet they've had to lower their fees.
The Blues also require physicians to file claims for the visits that the physicians say aren't covered, and the doctors have to abide by all the preauthorization and referral rules of the new PPOs. This has not gone over well. "Now I have to submit a claim for something I'm not getting paid for, and I'm also getting a negotiated amount of money I haven't agreed to," notes Chu.
But she and her three partners can't quit the Blues, which contribute about 70 percent of their business. Their only hope of redress lies in a lawsuit that the Michigan State Medical Society and the Michigan Osteopathic Association brought against the insurance giant last year.
Doctors say Blues violated contract terms
The medical societies' suit alleges that the Blues had no legal right to unilaterally extend the terms of its "TRUST" network agreement to the new PPOs without the physicians' consent. In a statement, Blue Cross Blue Shield of Michigan responds that it has the right to amend the network contract unilaterally, that the agreement encompasses self-insured plans such as the new PPOs, and that-whether or not office visits are covered-the contract's "intent" requires the doctors to accept a network rate in any plan for which the Blues decide to use the network.
The physicians' lawsuit also charges that the health insurer threatened doctors with termination from all of its TRUST network plans (which cover 3 million people) unless they lowered their fees to the PPO level. Michigan Blue Cross Blue Shield denies that it did that. Last February, however, it entered a court-sanctioned agreement not to enforce its new terms until the litigation is settled.
In its response to the suit, the insurer challenges the medical societies' right to sue on behalf of the physicians. The societies say they brought the suit because "the market power of Blue Cross makes it difficult for any single physician to stand up against their unilateral actions."
At press time, a state judge ruled that the medical societies had legal standing to sue the Blues on behalf of their members. She reserved judgment, however, on their request for a summary judgment. The trial originally scheduled to begin in December has been postponed.
Have the Blues been dishonest toward patients?
FP Raouf Seifeldin of Pontiac, MI, says that the Blues' effort to make doctors charge PPO-level fees for office visits "was really dishonest toward the patients. The patients were told they had office visits as a covered payment, and the physicians were stuck collecting from them."