Judge punishes Pennsylvania Blues plans for not producing documents

The insurers are considering an appeal.

By Amy Lynn Sorrel, AMNews staff. Nov. 5, 2007.

In a rare blow, a federal judge in Pennsylvania sanctioned three Blues affiliates and their attorneys, saying they intentionally delayed and impeded discovery in a class-action lawsuit that thousands of the state's physicians filed against the health plans over reimbursement issues.

The judge found that Capital BlueCross, Keystone Health Plan Central, Highmark Inc. and their lawyers acted in bad faith and "flagrant disobedience" of court orders to produce claims and coding information related to allegations of fraudulent payment practices.

In some cases it took the health plans more than a year to turn over records they had, the opinion stated.

"Defendants and their counsel have engaged in a course of conduct which makes it clear that they have not been forthcoming with the most important information in this case," Judge James K. Gardner wrote for the U.S. District Court for the Eastern District of Pennsylvania."To deny [doctors] the data ... is equivalent to denying [them] their day in court."

In the Sept. 28 opinion, the judge ordered the insurers and their counsel to pay doctors' legal expenses, which experts say could amount to several million dollars.

Kutztown (Pa.) Family Medicine, which filed the lawsuit in 2001, declined to comment on the ruling, and the doctors' attorneys did not return calls.

In court documents, the physicians said the health plans' tactics were a "calculated effort" to thwart their case.

Such discovery disputes are not uncommon, said Rocky Wilcox, general counsel to the Texas Medical Assn., one of at least a dozen state medical societies involved in similar class-action lawsuits filed across the country against other insurers.