Did you see this one? These guys are WAY ahead of the curve. The rest of the country better wake up and take notice. IMO.
Posted on: Friday, 9 March 2007, 09:01 CST
Blecher &Amp; Collins Files Class Action Law Suit Against State Compensation Insurance Fund and Wellpoint Health Networks
Today a class action lawsuit was filed in Superior Court, Los Angeles against State Compensation Insurance Fund and Wellpoint Health Networks and its wholly-owned subsidiary Blue Cross of California.
The lawsuit alleges: "the deliberate and collaborate efforts of the named defendants to suppress payments made to physicians for services provided to workers' compensation ('WC') patients to artificial levels substantially below fair market value. The State of California and studies by private entities have confirmed that physicians incur significantly increased costs when treating WC patients. As a result, the State of California adopted an Official Medical Fee Schedule ('OMFS') which accounts for these higher costs. However, the surgical rates in the OMFS have not been increased since 1985. In fact, the rates in the OMFS were reduced across the board by five percent (5%) effective January 1, 2004. The present OMFS continues to under-compensate physicians significantly even after the slight increase in the rates for certain non-surgical procedures effective mid-February 2007. At the beginning of 2005, defendant State Compensation Insurance Fund ('SCIF') directly operated its own network of physicians to provide medical care to WC patients of its insureds. SCIF paid physicians in its network in accordance with the OMFS. In mid-2005, SCIF dissolved its network and required its member physicians to contract with defendant Wellpoint Health Networks, Inc. ('Wellpoint'), through its wholly owned subsidiary and operating entity Blue Cross of California ('BCC'), in order to continue to furnish medical services to WC patients of SCIF's insureds. Simultaneously, BCC, which had earlier tried, unsuccessfully, to create a WC provider network, actively tied its insurance products by demanding that physicians in its commercial (i.e., non-WC) provider network also participate in its WC provider network and, correspondingly, that physicians seeking to participate solely in its WC provider network also participate in its commercial provider network. BCC, as the operator of the largest preferred provider network in California, has substantial market power. BCC exercises that power by, among other matters, reimbursing participating physicians at deeply discounted rates ('Prudent Buyer Rates') for medical services furnished to commercial patients. The Prudent Buyer Rates overall are substantially lower than the rates in the OMFS. However, BCC reimburses physicians treating WC patients, who also maintain commercial health insurance coverage through BCC or one of its more than 300 'affiliates,' according to the Prudent Buyer Rates, and not the OMFS or any other higher schedule. The arrangements between BCC and its 'affiliates' constitute price fixing. By locking tens of thousands of California physicians into a provider network and using their overwhelming market power to extract below cost prices, defendants have created a tremendous barrier for competing provider networks to furnish medical services to WC patients. Accordingly, defendants have improperly amassed substantial additional profits because their collective action, coupled with BCC's exercise of its market power, have forced the physicians who provide a significant volume of WC patient care in California to accept clearly non-compensatory, below market reimbursement. From a healthcare delivery standpoint, defendants will, by artificially depressing reimbursement levels to some of the lowest in the country, make it impracticable for a sufficient number of physicians to treat injured workers and make it difficult, if not impossible, to recruit a sufficient number of new physicians to California."
The complaint seeks treble damages under the California Antitrust Laws and injunctive relief to rectify the unlawful conduct. |
