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Doctors sue Blue Cross over health care for autoworkers
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LANSING -- While Dr. Betty Chu enjoys delivering babies and caring for women's health, she can't ignore the bottom line -- especially when so much of it comes from one source.
Blue Cross Blue Shield of Michigan, the state's largest health insurer, covers 70 percent of her patients.
Many of them are Oakland County autoworkers or their families who visit Chu's Clarkston and Utica offices. The workers pay entirely for office visits but at a reduced rate. The deal was negotiated in contracts between the United Auto Workers union and Detroit's Big Three automakers.
Yet Chu and other doctors say they never agreed to the lower fees.
Two groups representing 19,000 physicians have sued Blue Cross, accusing the insurer of unfairly and unilaterally imposing lower fees and trying to amend contracts.
"What we're upset with is we weren't brought to the table," said Chu, a 34-year-old obstetrician and gynecologist. "We're being forced to do what they say and we don't really have any input."
A UAW spokesman declined to comment on the lawsuit. The suit, if successful, eventually could affect employees and retirees of Ford Motor Co., General Motors Corp. and DaimlerChrysler AG's Chrysler Group.
While the dispute specifically involves office visits, it gets at a larger issue: If doctors refuse to give autoworkers reduced fees, can Blue Cross exclude the doctors from seven other preferred-provider plans that cover millions of patients?
If the answer is yes, doctors say, they will have less freedom and their patients fewer options when choosing a physician.
Dan Schulte, an attorney for one of the medical groups, said the lawsuit is aimed at preventing Blue Cross from controlling what doctors can charge for services.
In the case of the automakers' preferred provider plans, about 500,000 current and retired UAW workers and their families pay the full cost of an office visit. Because Blue Cross designates it as a "covered" benefit, the fee is discounted anywhere from 25 to 40 percent.
"We see this as an alarming trend," said Schulte, who represents the 14,500-member Michigan State Medical Society in the suit, which also has been brought by the 4,500-member Michigan Osteopathic Association.
The concern is partly due to the increasing popularity of PPOs, which allow employers to control health care costs by nudging employees into a cheaper network of doctors. Doctors like PPOs because they get a built-in volume of patients and don't have the burden of collecting payments. In return, they agree to lower fees.
When the automakers moved from traditional plans to PPOs in 2004, however, doctors say they didn't sign up for the new bargain. They worry Blue Cross could negotiate similar arrangements in other employer-funded PPOs -- the most common type of insurance -- without physicians' consent.
"It's essentially price-fixing," Chu said.
But Blue Cross spokeswoman Helen Stojic said autoworkers shouldn't be kept from receiving discounts already received by other patients in the Trust Network Agreements, which also cover state employees and educators.
"We just don't understand when a network's been around and is servicing a million people already, why it couldn't also service autoworkers at the same reimbursement," she said.
The case is pending in Ingham County Circuit Court. Judge Joyce Draganchuk likely will consider the issue in the spring. But first, in early February, she will take up a more pressing matter: how to handle doctors who refuse to honor the reduced fees for office visits.
Physicians feel uneasy because Blue Cross sent them a letter with clarifying amendments to the PPO contracts, effective Dec. 27. They say the move, if not challenged in court, could allow the insurer to cut off doctors who refuse to honor the discounts. They want the judge to prevent Blue Cross from doing that until the suit is resolved.
"They say the letter is a clarification," said Julie Novak, director of medical economics for the state medical society. "We would argue it is a wholesale change in the contract."
Stojic said she couldn't comment about whether Blue Cross will discontinue some doctors' contracts.
"We'll have to leave that to the courts," she said.
Chu said she would rather not worry about the lawsuit but has no choice.
"We all know the auto industry is under pressure with health care costs," Chu said. "We may have agreed to the discounts. None of us are starving. But we just want to be part of the big picture."
On the Net:
Blue Cross Blue Shield of Michigan: http://www.bcbsm.com
Michigan Osteopathic Association: http://www.moa-do.com
Michigan State Medical Society: http://www.msms.org
United Auto Workers: http://www.uaw.org
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