California plan backs down from some scheduled fee reductions

The announcement comes after regulators open an inquiry as to whether Blue Cross fulfilled terms of its merger agreement with the company that became WellPoint.

By Pamela Lewis Dolan, AMNews staff. Sept. 10, 2007.

Days after a state hearing looking at whether Blue Cross of California had reneged on promises it made in order to get a merger approved, the plan said it would back down from some proposed reimbursement cuts.

But the plan's move might not be enough to keep some physicians from reversing their decisions to drop the insurer.

Blue Cross says its move was not related to the hearing, but to a re-examination of its reimbursement schedule after physicians wrote the plan's medical directors to take a look at some of the proposed reductions.

"When they looked at them they said, 'You're right, those weren't intended to be reduced,' " Blue Cross spokesman Nick Garcia said.

Among the services for which the insurer decided not to decrease reimbursement are hospital-based newborn care, mammograms and colonoscopies. Additionally, the company said immunization reimbursements would increase and would be reviewed quarterly as opposed to annually.

California Medical Assn. spokeswoman Karen Nikos said her organization is "pleased that [Blue Cross has] made these changes, definitely, but we are concerned that there remain many procedures that involve screenings and preventive procedures, in particular, that are being reimbursed at very low levels."

In a memo to physicians, Blue Cross wrote that "most physicians (approximately 70%)" would see an overall rate increase or no change in overall compensation under the new fee structure. Left unstated in the memo was the approximately 30% of physicians who would see a rate cut.