"It's not only unfair but untenable," said Mazer, noting that it is not uncommon for insurers to "bundle" or "downcode" claims, in which a medical procedure will be coded under a related but cheaper rate. Mazer, a solo practitioner, has a full-time employee devoted to tracking claims, but sometimes he gets so frustrated that he pursues the bills himself, with certified mail and phone calls threatening to sue.
Blue Cross spokesman Michael Chee, citing privacy concerns, said he couldn't comment about Mazer's case. But Chee said procedural codes may be bundled if Blue Cross views them as essentially one service. As an example, he said, some physicians will bill two codes for a mammogram--the procedure itself and the accompanying office visit. "You can't do it separately, you get the consultation with the mammogram," he said.
Millions of Claims Processed Monthly
Blue Cross processes about 3 million claims a month. The company provided a computer record showing that 97% to 99% of the claims received in the last 12 months were paid in 30 days or less--well within the state's legal requirement. The insurer did not, however, provide further details about the 1% to 3% of bills that are held up--which translate into tens of thousands of claims every month.
Blue Cross, which is owned by publicly traded WellPoint Health Networks of Thousand Oaks, has not been fined by the Department of Managed Health Care for late payments. But the insurance carrier has been a frequent target of criticism, partly because of its large size and aggressive negotiating stance. Last year Blue Cross settled a lawsuit filed by the Catholic Healthcare West hospital chain over payment rates and delays. Financial terms were not released.
A spokesman for Catholic Healthcare West, which owns 38 hospitals in California, said that Blue Cross has made good progress since the settlement, but that in general the hospital company was still having trouble getting timely payments from insurance companies.
Some insurers, such as Blue Shield of California, have tried to work out a more friendly arrangement with doctors over payment issues. Earlier this year the San Francisco-based insurer signed an agreement with the California Medical Assn. to disclose physician fee schedules--the rate at which each medical procedure or service is reimbursed--and limit changes in them to no more than once a year. (Blue Shield said that so far this year, it has paid 98% of its claims within 45 days.)
The new state regulations require insurers to disclose their policies regarding reimbursement for multiple procedures and the bundling of claims. Insurers would also have to give providers a 30-day notice before making changes to fee schedules. Some doctors have complained that insurers change their fee rates at will without giving prior notice.
The disclosure requirement doesn't mean physicians will get paid more or see less bundling, but the new regulations create a process for resolving disputes more quickly. Doctors say disclosure of fee schedules will allow them to compare rates among health plans, which could help them make better business decisions about their practice.
The new regulations also would hold HMOs directly responsible for monitoring medical groups with whom they contract, requiring the health plans to file quarterly reports detailing how the physicians' organizations are complying with the state's prompt-pay laws.
This added oversight could be significant in California, which is unlike most other places in that HMOs pay doctors' groups monthly capitation fees--a preset amount per HMO member. Those fees are what medical groups must manage in paying out claims that they receive from their affiliated doctors. But physicians say that it is sometimes just as hard to collect payments from medical groups as it is when they bill the insurer directly.
Regulators said that based on their review, one out of five medical groups in California was not paying 95% of the claims to doctors within 45 days of receiving bills. Zingale said that while medical groups were being held to a standard of 95%, he was seeking 100% compliance from the health insurers--a rate that the national HMO association called unreasonable.
New Rules Are Labeled One-Sided
The new regulations were prepared in accordance with AB 1455, which was passed in 2000. The legislation was pushed by the California Medical Assn. and gave the Department of Managed Health Care powers to investigate and impose sanctions against health plans for unfair payment patterns to health providers.
Walter Zelman, president of the California Assn. of Health Plans, which represents most of the state's medical insurers, said his group supported the original legislation. But he said that the newly drafted rules are one-sided in the way they treat responsibility for the prompt payment of claims.
"It's not always clear whose fault it is. Claims may have been filed wrong," he said. "There could be mistakes and failings on both sides ... but if a provider or hospital does something wrong, there is no equivalent sanction mechanism in place."