Kansas City doctors allege that insurers fixed prices

Physicians have filed class-action lawsuits in Kansas and Missouri accusing managed care firms of lowering reimbursement rates.

By Mike Norbut, AMNews staff. May 23/30, 2005.

Hundreds of Kansas City-area physicians filed proposed class-action lawsuits against numerous insurers doing business in the region, accusing the companies of colluding to set and fix reimbursement rates and not paying doctors according to contractual obligations by doing things such as delaying, downcoding or bundling payments.

Doctors allege that the insurers' actions resulted in unfairly low reimbursement rates. They are asking the court for financial damages and an order requiring the managed care companies to stop the alleged practices.

In their lawsuit, the physicians say that more than a dozen insurance companies, which control about 90% of the Kansas City market, "acted in concert to control" medical care reimbursement rates in the area.

"The region is particularly susceptible to price-fixing because it is controlled by a few dominant companies who have conspired to cultivate and use their market power to force unconscionable reimbursement rates from doctors with the intent to manipulate prices," according to the physicians' anticompetitive lawsuit filed in Jackson County, Mo.

The physicians are basing their claims partially on a survey financed by Mid America Medical Affiliates, a Kansas City lobbying and education network of about 1,500 physicians.

The survey, which was completed by an independent company, compared reimbursement rates in Kansas City with those in Des Moines, Iowa; St. Louis; Springfield, Mo.; Topeka, Kan.; and Wichita, Kan. It found that Kansas City physicians were paid as much as 30% less for the same procedure than physicians in the other cities, said William D. Soper, MD, a family physician and Mid America's president.