CMA: Suit Against Blue Cross Gains Class Action Status
A state superior court judge ruled recently that a suit filed last year by the California Medical Association against Blue Cross of California "qualifies as a class action." Judge David Garcia said that Blue Cross' argument "that the court did not have the authority to order class arbitration" was "without merit," and that the CMA's suit was "ripe for class arbitration." The San Francisco Business Journal reports that as a result of the ruling, "the approximately 13,000 doctors involved in the suit won't have to press their cases individually." The CMA suit contends that Blue Cross "breached its contracts with the doctors by changing the reimbursement schedules without following agreed-upon notification and review procedures." The suit seeks to have the insurer "submit to binding arbitration" in the dispute. Hobart Swan, CMA director of media relations, said the contract "spells out very clearly the steps Blue Cross has to follow to change parts of the contract." He said, "They clearly did not follow those steps." Edward Sangster, an attorney representing some of the doctors, asked, "How would you like to get a letter at the end of August saying, 'Effective Aug. 1 we reduced your salary?'" Blue Cross spokesperson Elise Anderson "said the company is appealing the ruling but would not comment further."
It's The Principle Of The Matter
Swan says the amount of the disputed payments is "in the millions." But one Walnut Creek doctor affected by the reimbursements, Dr. Richard Tirrell, said he does not believe the money will be repaid, adding that the "suit is about the principle of preserving contracts." Sangster said, "They're reducing these fees in the name of cost controls at a time (Blue Cross) is posting record profits." The Journal reports that Blue Cross' parent company, WellPoint Health Networks, "earned $223 million on revenue of $5.8 billion in 1997." At the same time, Blue Cross "has received plenty of unwelcome publicity this summer over its reimbursement rates," namely from disputes with Sutter Health and Catholic Healthcare West (Delevett, 8/17 issue).