Blue Cross of California May Eliminate Contract With Doctors Medical Center in Modesto

Blue Cross of California, the state's largest health insurer, may end its contract with Doctors Medical Center in Modesto on Nov. 30 over allegations that the Tenet Healthcare-owned hospital billed it for "numerous improper, medically unnecessary" coronary bypass procedures, a Tenet filing to the Securities and Exchange Commission stated, Bloomberg/Los Angeles Times reports (Bloomberg/Los Angeles Times, 11/5). On Friday, Blue Cross asked Doctors to suspend its nonemergency bypass operations until its concerns were addressed. When Doctors officials refused the request, Blue Cross immediately stopped authorizing payment for procedures at the hospital (Holland/Carlson, Modesto Bee, 11/4). The plan to terminate the contract hinges on whether the facility implements changes to address concerns about patient safety and the quality of care that were raised following an independent review of its cardiac procedures (Rapaport, Sacramento Bee, 11/5). The review, which was released Friday, found that a high percentage of coronary bypass operations performed at Doctors and at Redding Medical Center were medically unnecessary (California Healthline, 11/3). A panel of three doctors from Stanford University, the Mayo Clinic and the University of Pennsylvania found that of 23 coronary artery bypass grafts performed at Doctors, 13 "did not meet the requirements of medical necessity for that procedure," Dr. Jeff Kamil, the medical director for Blue Cross, said (Modesto Bee, 11/4). The same panel concluded that 85% of 30 Redding surgeries were unnecessary. The panel members examined surgeries performed between Jan. 1, 2000, and Jan. 31, 2003 (Colliver, San Francisco Chronicle, 11/5). They reached their conclusions based on comparing medical records with original lab results, including images of patients' arteries that were taken before surgery (Sacramento Bee, 11/5).

However, Tenet spokesperson Steven Campanini said that the study sampled only 1.2% of the procedures performed during the three-year period and that the conclusions were drawn without consulting physicians or patients about the operations (San Francisco Chronicle, 11/5). He added, "We believe they are making allegations based on incomplete information." Dr. Eric Ramos, chief of the Doctor's medical staff, said the review used "restrictive criteria" for determining when surgery was needed, adding that "in many cases patients can get by" with less invasive procedures but experience a lower quality of life than those who receive surgery, the Modesto Bee reports. He said that the criteria may have been developed as a "way for [Blue Cross] to save money and not have to pay for bypass surgery" for people who really need it. Another independent review is being organized to get "down to the bottom of the matter," Ramos said (Modesto Bee, 11/4). Campanini said Blue Cross might have conducted the study because of a $50 million billing dispute with Tenet (San Francisco Chronicle, 11/5). Tenet alleges that Blue Cross has failed to pay for services at some of its hospitals, including Doctors (Modesto Bee, 11/4).

The Blue Cross investigation could prompt other insurers in the state to begin their own probes of Tenet operations and could lead federal officials to expand their investigations of the cardiac programs in Redding and Los Angeles to include Modesto, according to the Sacramento Bee. Sources said that a federal grand jury had investigated Doctor's for the possibility of criminal action but found "nothing to warrant charges," the Sacramento Bee reports (Sacramento Bee, 11/5).