CMA testimony on Blue Cross
CMA Calls Blue Cross a Leader in Profits, Not Patient Care
California Medical Association
California Physician
August 9, 2007
CMA on Tuesday asked the Department of Managed Health Care to take action against Blue Cross of California for jeopardizing the physician-patient relationship and engaging in unlawful business practices that have reduced patient access to care.
CMA testified at a public hearing in Los Angeles that Blue Cross has violated the promises it made to California patients when it merged with Anthem Health Care in 2004. Since that merger, Blue Cross has consistently increased premiums, while reducing the amount of money spent on patient care. The insurer is now dangerously close to not having enough physicians available to serve the 8.3 million Blue Cross patients in California.
With the consolidation of the health plan industry, both nationally and in this state, competition among the insurance companies has been severely diminished, if not eliminated, much to the detriment of the very individuals these plans promise to serve patients and their treating physicians, CMA said in its written testimony. The turmoil created by Blue Cross has taken its toll on everyone. It must be remembered that it is physicians who provide medical care to patients, not health plans.
DMHC called the hearing to review commitments made by Blue Cross when it merged with Anthem three years ago. DMHC this year alone has initiated 18 enforcement actions against Blue Cross, including multiple fines a significant increase from previous years.
CMA contends that among a vast collection of misdeeds, Blue Cross has:
- reimbursed physicians at unconscionably low levels, at times below the actual cost of care;
- increased consumer premiums at a much higher rate than any other major health insurer, raising rates as much as 10 percent in a single year;
- rescinded authorization and refused to pay for care provided in good faith;
- reduced reimbursement levels without appropriate notice;
- retroactively canceled individual health insurance coverage after policyholders got sick.
For at least a decade, Blue Cross has consistently spent less on medical care than the 85 percent required by law, at the same time raising premiums and increasing profits.
While Blue Cross seems averse to paying physicians fairly and spending adequately on health care, the insurer plans to spend $2 million this year trying to defeat health reform proposals designed to increase access to care in California.
Blue Cross’s misbehavior shows significant signs of diminishing the supply of physicians, already a growing problem in California. CMA and its county component medical societies have received a number of calls from physicians who have determined that they can no longer financially and ethically provide medical care under the dictates of Blue Cross and are being forced to terminate their contracts altogether.
http://www.calphys.org/html/cc482.asp
CMA testimony:
http://www.cmanet.org/upload/bc_testimony_080707.pdf
Comment:
By Don McCanne, MD
Wall Street analysts have continued to praise Blue Cross of California and its parent company (WellPoint) as being leaders in private insurance innovations that have led to stellar performances in the equities markets. Blue Cross/WellPoint has led, and in order to remain competitive, the others (including the non-profits) have followed.
As we reform our system of health care financing, do we really want more of this type of leadership? If not, we’re going to have to let our politicians know, because they’re headed that way.