The Department of Managed Health Care (DMHC) has found that Blue Cross of California has been using illegal contracting practices against physicians. The insurance giant has been forcing physicians to sign its contracts without consulting a legal or financial advisor, unless that advisor is approved by Blue Cross – a tactic only available to a company with the enormous market clout of Blue Cross. 

Under the insurer’s mandatory “confidentiality agreement”, Blue Cross had the right to determine “at its sole and absolute discretion” whether or not a physician could use a particular attorney or negotiator. In February, CMA notified state insurance regulators of this unfair agreement, which not only violates laws protecting the confidentiality of attorney-client communications, but also prevented physicians from being fairly represented in managed care contract negotiations. CMA also urged Blue Cross to withdraw the unfair agreement.

At press time, DMHC was considering issuing a cease-and-desist order against Blue Cross to stop its illegal practice. Stay tuned to next week’s Alert for more details.

Contact: CMA’s reimbursement help line, 888/401-5911 or drice@cmanet.org.