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Blue Cross Withdraws Controversial Endoscopy Payment Policy
Blue Cross last week agreed to withdraw its controversial payment policy that cut physician reimbursement by 20 percent for endoscopic procedures performed in outpatient hospital settings and that gave 5 percent bonuses for procedures done in doctors’ offices or Blue Cross-contracting surgery centers. CMA in May protested the new policy with state authorities, saying the rule places corporate profits ahead of patient care and safety and is likely illegal. CMA believes that it violates the state insurance code, which requires that medical decisions be “unhindered by fiscal and administrative management.” California Hospital Association in June filed a lawsuit in Los Angeles County Superior Court, accusing Blue Cross of violating state law by inducing doctors to make medical decisions based on financial considerations rather than clinical judgment. Blue Cross announced its decision to withdraw the policy after the Department of Managed Health Care (DMHC) filed a brief with the court, saying that the plan failed to obtain DMHC approval before making such a significant policy change, as required by state law. DMHC said in its brief that to obtain such approval, Blue Cross would have to justify why it should be exempt from Health and Safety Code section 1348.6, which outlaws payment incentives designed to deny, limit, or delay patient access to specific services. “The legislature has determined that the potential harm to enrollees that could result from the granting of specific financial incentives outweighs the incremental reduction in health care costs that cost-containment strategies like the endoscopy policy would provide to California’s health care system,” DMHC explained in its brief. CMA is urging Blue Cross to readjudicate claims for endoscopic procedures performed in outpatient hospital settings that were paid between July 1 and October 4 (the dates the policy was in effect). Contact: Aileen Wetzel, 916/444-5532 or awetzel@cmanet.org.
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