Blues' cut in medical fees OK'd


Infuriating many doctors, the state insurance commissioner approved yesterday a Blue Cross and Blue Shield of Maryland plan that slashes specialists' fees as much as 24 percent.

Fees paid to primary-care doctors will increase, but the specialists' cuts are so deep that Blue Cross and its customers are expected to net $45.6 million a year in savings under the new payment system.

Accusing the company of being "arbitrary and capricious," Dr. Howard Siegel of the state medical society asserted that the money taken out of doctors' pockets "goes for higher corporate and management profit and does not go to health care."

But Blue Cross officials said the savings will pay for subscriber premium decreases the company has already put into effect in anticipation of a favorable decision by Commissioner Dwight K. Bartlett III.

Medical society spokeswoman Ruth Seaby said the group has not decided whether it will appeal the decision in the courts. A company representing 900 doctors filed a lawsuit in January in Baltimore County Circuit Court challenging Blue Cross' fee-cutting authority. Lawyers involved in the suit could not be reached for comment.

Mr. Bartlett said he approved the fee plan to bolster Blue Cross' financial condition, which he said is "not as robust as it could be."

Blue Cross is the largest health insurer in the state and, as a result, the fee cuts will be felt by a majority of specialists in Maryland when they take effect April 5. About 14,000 doctors and 6,000 other health-care professionals, including social workers, physical therapists and speech therapists, have contracts with Blue Cross.

Specialists' fees will be chopped an average of 12.2 percent, while fees paid to primary-care doctors will increase an average of 8.1 percent, according to Blue Cross officials.

Mr. Bartlett's nine-page decision yesterday did not spell out which specialties would be hit hardest. Blue Cross officials, citing examples, said fees will decrease an average of 23 percent for gastroenterologists and 17 percent for radiologists. Internists will receive a 4 percent increase.

But David D. Wolf, chief operating officer of the company, cautioned that the impact will vary individually within each specialty according to the type and volume of procedures a doctor performs.

Mr. Bartlett made his decision nearly four months after the company submitted the payment plan with the hope that it would be approved within a few weeks. But the commissioner held a public hearing and required additional information from Blue Cross as the medical community rose up in opposition.

The 7,000-member medical society warned that doctors would drop out of the Blue Cross network and force patients to find new physicians or pay out of pocket for care. Officials of the Johns Hopkins and University of Maryland health systems said fee cuts would have a "severe impact" on their ability to provide charity care to poor people.

Medical society representatives and Blue Cross officials traded harsh accusations at a two-day public hearing in January.

Doctors warned that the fee plan could lead to "assembly-line medicine," but the company charged that the doctors' opposition was motivated by self-interest.

Mr. Bartlett said the law limited his authority to evaluating the impact of the fee plan on subscribers, not doctors. Rebutting the society's assertions that physicians would flee Blue Cross, Mr. Bartlett said the company's new fees will be "in the range of its competitors" and not cause an "extreme loss" of doctors from the Blue Cross network.

Mr. Bartlett said any loss of doctors is "not as serious a threat" to Blue Cross as "the potential threat to [Blue Cross'] stability if the proposal is not approved. Although the company's financial health has improved since 1992, it is "not as robust as it could be to withstand the expected slumps" in the highly cyclical insurance business.

Blue Cross "must reduce its medical costs, while continuing its improved underwriting performance and cost-cutting measures," the insurance commissioner said.

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