Pathologists sue Blue Cross over payment change.

Reimbursement for certain tests becomes a legal issue

A group of pathologists has sued Blue Cross of California, charging its members were not reimbursed for clinical procedures agreed upon under the terms of the company's Prudent Buyer Plan.

The California Society of Pathologists, a membership organization of more than 500 physicians, filed a lawsuit on behalf of its members to recover a year's worth of lost revenue. The organization claimed the insurer reneged on its contract after implementing a cost-cutting measure last February that restricted payment for the testing of blood, urine and tissue samples.

According to Bob Achermann, group executive director, a pathologist traditionally charges for his services when a chemical test is conducted, although he generally performs an advisory role and is not actively involved in

the clinical process. His actions as supervisor still render him liable for the test outcome.

Reimbursement works one of two ways: Either the hospital receives payment from the insurance company for the amount it bills out and then pays the physician for these clinical services, or the doctor bills the insurance company directly.

This system appeared to function effectively until recently, when physicians say they were caught in the crossfire of Blue Cross' new reimbursement plan. Although the company continued to pay for the technical component of the laboratory analysis, in most cases, it refused to cover the cost for the pathologist's services.

"The issue is not how much they are going to pay, it is whether they are going to pay at all," said Achermann. The pathologists have lost an estimated $1 million to $2 million since the suit was filed in July, according to figures provided to Achermann by Blue Cross officials during a preliminary round of talks.

In September, a Sacramento Superior Court judge ruled against the mammoth insurer after it filed a motion for dismissal of the suit. Blue Cross claimed in its defense it was not liable for the medical costs, even if the complaint was valid.

No trial date has been set.

Another factor entering the picture is a bill submitted to Blue Cross by Cedars-Sinai Medical Center for expenditures associated with clinical pathology services conducted before December 1990 and through February 1991.

Cedars only began billing Blue Cross in October after the results of its own survey showed other medical facilities in the area had already implemented similar proceedings, said Dr. Stephen A. Geller, board member for the California Society of Pathology and chairman of the Department of Pathology and Laboratory Medicine at Cedars.

"It is my understanding most hospitals in Los Angeles were billing for services and Blue Cross was paying for a professional fee," Geller said. "We felt it was appropriate for us to do it."

The decreasing availability of federal funds for medical reimbursement may have prompted Cedars to take action. It could also be seen as a casual factor for Blue Cross's decision to begin cutting costs.

Geller acknowledged it may be difficult to drum up public support for physicians. However, he said, for some pathologists the issue of reimbursement is significant and amounts to roughly 15 to 20 percent of clinical laboratory pathology services performed. He dismissed Blue Cross's actions as "a unilateral and arbitrary discontinuation of payment to everyone."

Before he became involved in the case, Geller said, the issue of filing a lawsuit to recover for lost compensation had been addressed by the executive committee at Cedars-Sinai, which offered its approval without debate. It was also presented to officials at the College of American Pathologists in Northsville, Ill., for their review.

"If the billing ceases forever, pathologists will have to find other ways to support their lives and devote less and less time to this," Geller said.

California is not the first state where pathologists have attempted to recover their expenses for clinical investigations. It is common practice in most states, he claimed.

Officials at Blue Cross declined to comment on the action. Company spokesman Michael Chee said he was not at liberty to discuss the case, due to the sensitive nature of present negotiations.