Last year, CMA analyzed Anthem Blue Cross’s standard physician contract (the Prudent Buyer Plan Participating Physician Agreement) and found that it was in many ways inconsistent with California law. In September 2007, CMA sent a letter to the Department of Managed Health Care (DMHC) expressing our concerns with the contract, and formally requested that DMHC take action to bring the contract into compliance with state laws and regulations. We are pleased to report that Blue Cross has removed the most problematic provisions from its contracts.

The deleted provisions, among other things:

• Gave Blue Cross the authority to unilaterally decrease contracted payment rates if a physician refers patients to out-of-network providers.
• Required physicians to agree to follow the utilization review requirements of not just Blue Cross, but also of all “other payors” that access the Blue Cross network.
• Required physicians to agree to treat injured workers and prepare complicated Worker’s Compensation reports, even if they do not have the qualifications to engage in this activity. (The new contract allows physicians to opt-out of treating Worker’s Compensation patients.)
• Authorized Blue Cross to apply a physician’s discounted rates to all practice locations and settings (e.g. rural, urban, academic etc), not just to the tax ID number under which the contract was signed.
• Allowed Blue Cross under certain circumstances to disregard physicians’ requests to terminate their contracts.

These and other problematic provisions will not be included in new and renewing physician contracts, and Blue Cross has informed CMA that it will not enforce these provision in existing contracts.

Although the new contract continues to include some problematic provisions, the more offensive provisions have been deleted. CMA will continue to work with Blue Cross to address our outstanding concerns.

Physicians are reminded that before they sign a health plan contract, it is important to know what value that relationship will bring to their practice. You do not have to accept contracts that are not mutually beneficial.

To help physicians negotiate and manage complex third-party payor agreements, CMA has published a contracting tool kit, “Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations—A Focus on Payor Contracting.” The tool kit is available free to members at the members-only website. Nonmembers can purchase the tool kit for $100 in the CMA bookstore.

Contact: Aileen Wetzel, 916/551-2037 or awetzel@cmanet.org.