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California doctors fight for right to counsel during negotiations

Medical society officials ask the state to review a policy Blue Cross says helps protect company information.

By Amy Lynn Sorrel, amednews staff. April 16, 2007.

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The California Medical Assn. is challenging a Blues "confidentiality agreement" that physicians say has nothing to do with privacy and everything to do with taking away their right to fair contract negotiations.

Before contract discussions begin, Blue Cross of California is requiring doctors to sign a document that restricts their ability to retain an attorney or a consultant to help them in the process. The provision gives the plan "sole and absolute discretion" to decide whether to deal with the third party or exclusively with the individual doctor, the agreement states.

Among other things, the document also requires any consultant involved on behalf of a doctor to give back to Blue Cross, at the plan's request, all "materials incorporating any confidential information," including copies generated during the negotiations.

Doctors say the unprecedented agreement violates state laws that protect attorney-client relationships and ensure fair business practices. At the same time, physicians say it puts them on uneven footing with large managed care plans.

"It's critical that if there's going to be any kind of level playing field and realistic negotiation over a contract, clearly doctors have to be in a position to have the ability to go to consultants and lawyers to advocate on their behalf," said Catherine I. Hanson, CMA vice president and general counsel.

Peggy Hinz, a spokeswoman for WellPoint, Blue Cross' parent company, said the agreement was intended to protect confidential company information, such as reimbursement rates and services, from public disclosure. "It is not the intent of Blue Cross to in any way hinder the ability of doctors or hospitals to engage counsel," she said.

Medical society officials in February asked the state Dept. of Managed Health Care to investigate the matter, and the CMA is considering further legal action if Blue Cross does not rescind the policy. The California Hospital Assn. sent a similar letter to state officials in February.

Hanson said state laws governing attorney-client privilege bind lawyers to be loyal solely to the physician or practice they represent, without any other conflicting relationships. But signing the confidentiality agreement interferes with that attorney-client privilege by eliminating a lawyer's ability truly to assist the doctor, she said.

Additionally, the policy defines confidential information so broadly that it includes privileged documents, not just Blue Cross' proprietary information, Hanson said.

Hinz, however, said the requirement to return documents excludes communications between doctors and their counsel that are protected under attorney-client privilege.

Dept. of Managed Health Care spokeswoman Lynne Randolph said the agency was looking into the issue but had not drawn any conclusions.

Meanwhile, Blue Cross said it was cooperating with the agency's inquiry and was in the process of revising and clarifying the confidentiality agreement based on feedback from doctors and hospitals.

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