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Regional News - February 2, 2000

Doctors' group battles insurer over contract

Highmark to institute new way to reimburse

By Luis Fabregas

A group of local doctors is battling the region's largest insurer over a new contract they say threatens the quality of care and reduces their fees.

The backlash against Highmark Blue Cross Blue Shield centers on the amount of fees that cardiologists, ophthalmologists and orthopedic surgeons will receive for treating the insurer's SecurityBlue members.

Pending state approval, Highmark will implement a new reimbursement method July 1 that will set fixed fees for doctors in the plan. SecurityBlue, the insurer's Medicare HMO, has about 145,000 members. Nearly 70 percent live in the Pittsburgh area.

An estimated 15 to 20 percent of the physicians in the three specialties will see fees reduced somewhat under the new schedule, according to Highmark. Highmark spokesman Michael Weinstein did not know how many doctors would be affected.

Several doctors' groups have told the insurer the new system is just a way of restricting care to patients.

Perhaps the most vocal is the 800-member local chapter of the American College of Cardiology. The governor of its board, Dr. Alan Gradman, said the new system will force doctors to do more work for less money.

"It's a surreptitious method of rationing care," said Gradman, chief of cardiology at The Western Pennsylvania Hospital in Bloomfield. "My concern is that there will be an incentive to under-treat patients. Our fear is that patients will not get all the services that they should get."

Fixed fees have traditionally sparked turmoil among physicians and managed care companies. Highmark has instituted such fees for years.

Capitation fees, which an insurer pays a doctors' group each month to take care of a patient, have caused particular concern. Doctors pocket the same fee regardless of a patient's health status, from one who never sets foot in a doctor's office to one who undergoes extensive treatment.

The contract does not involve capitation fees, but similar fixed fees, Weinstein said. Unlike capitation fees that cannot be altered, the so-called fixed amounts can be altered based on a patient's sickness.

"The incentive is to provide the right care depending on what the needs of the patient are," Weinstein said.

Weinstein said the new system will help Highmark reduce variations in medical practices that eventually affect premiums.

Data from Highmark's claims show about 15 to 20 percent of physicians in the three specialties deviate from standard treatments and incur higher costs in treating a patient. This group of physicians would likely lose money, according to Highmark.

Under the new system, developed with the help of Adesso Healthcare Information Services, doctors will be paid a fixed amount for treating SecurityBlue members depending on the patient's condition. Neither the physicians group nor Highmark would disclose details of the contract, such as fees.

But some physicians fear the insurer may retaliate. Highmark has told physicians that if they reject a SecurityBlue contract, they will not be able to participate in any of the other Highmark plans.

"Essentially they're holding a gun to our heads," Gradman said. "They control a big part of the market. If you don't do business with them, you're out of business."

Gradman said doctors should have more power.

Weinstein said forcing doctors to sign blanket contracts is a way to ensure continuity.

"If an employer switches from one plan to the other, it's not fair to the consumer," Weinstein said. "The consumer should be able to feel that their physician is in the Highmark family of programs."

While Gradman said the physicians group will explore options to forego the contract, he said their bargaining position is weak.