ENCINITAS, Calif. — A state health agency is investigating whether there is a "systemic problem" with a doctor-owned group working for the insurance industry that has turned down numerous requests by other doctors here for pediatric specialty care for children, officials say.
Investigators are looking to see if the rejections are based on legitimate medical disagreements or on a desire by the group to boost its profits by illegally holding down costs for health-maintenance organizations.
Acting on a complaint by a group of pediatricians in his affluent stretch of coastal northern San Diego County, investigators for the Department of Managed Health Care are probing Primary Care Associates, a for-profit group that, on behalf of HMOs, passes judgment on requests for coverage by physicians.
Kevin Donohue, chief counsel to the department's director, said Friday that investigators are looking into seven cases forwarded by El Camino Pediatrics, the region's largest pediatric medical group.
At issue is the pediatricians' insistence that when their patients need surgery and other advanced care they should be seen by physicians who specialize in treating children rather than physicians who treat similar conditions in adults.
Primary Care Associates has shown a preference for sending children to physicians who treat adults and, on the whole, are less expensive, but lack advanced training and experience in dealing with the unique problems of children, El Camino Pediatrics doctors allege.
After months of bitter behind-the-scenes wrangling, Primary Care Associates dropped El Camino this month as a client. Wayne Knight, executive director of the San Marcos-based Primary Care Associates, declined to comment.
Under the state's managed care system, physician groups doing business with health-maintenance organizations must contract with an "independent practice association" -- such as Primary Care Associates -- to review their requests for coverage.
"We were too expensive because we were demanding proper care for our kids," said Dr. Frederick Frumin, managing partner at El Camino.
Donohue said that it was too early to decide whether the rejections were based on Primary Care Associates' desire for higher profits or on legitimate disagreements with doctors.
He noted that it is not legal to make medical decisions motivated by profit. Under the state system, the independent practice associations, in effect, get bonuses from HMOs for limiting costs.
Caught in the middle of the dispute are parents such as Rebecca Escobar, whose infant daughter, Kathren Grace, was born with craniosynostosis, a birth defect in which the skull prematurely closes and threatens to stifle the growth of the brain, potentially causing mental retardation, seizures and blindness.
If surgery is done in the first months of life, chances are good that the condition can be corrected. If surgery is delayed, the procedure is more complex and riskier.
Kathren Grace's primary physicians had referred her case to a pediatric neurosurgical team but Primary Care Associates denied the request for coverage.
As it had in other rejection cases, El Camino Pediatrics began an aggressive appeal. As weeks dragged by, Escobar feared that even if Primary Care Associates or the HMO relented, it might be too late for her daughter to receive the simpler, safer surgical procedure.
"It was so frustrating," said Escobar. "It's hard enough to have a baby who needs surgery, but then to have people fighting you on it is just terrible."
Rachel Hazen of San Marcos had much the same experience when Primary Care Associates turned down a request for coverage to have a pediatric craniofacial team correct the cleft palate of her 2-year-old daughter, Payton. Instead, Primary Care Associates said it would approve coverage only if the procedure were done by an oral surgeon, according to El Camino Pediatrics.
After checking the surgeon's credentials to see how many cleft palate operations he had done, Hazen and her husband lacked confidence that he was right for their daughter.
"I was in tears," Hazen said. "It took months and months of stress and frustration. It was horrible."
Similar rejections for pediatric specialty care were issued by Primary Care Associates for a boy with a brain lesion, a boy with chronic eye infections and a girl with a rare skin condition, among others, according to documents filed with the Department of Managed Health Care.
El Camino Pediatrics assigned an employee to fight Primary Care Associates full-time on appeals.
In each appeal, pediatric specialty care was ultimately approved for coverage; Kathren Grace Escobar, Payton Hazen and other children were treated by the specialists of their parents' choosing.
In May, Knight informed Frumin by letter that Primary Care Associates was severing ties with El Camino Pediatrics -- its 11 doctors and 6,000 patients -- effective in August. Even without El Camino, Primary Care Associates oversees referrals and treatment for medical groups serving more than 5,000 patients.
Frumin's group is now affiliated with Children's Physicians Medical Group, an offshoot of Children's Hospital of San Diego, to perform the same function of vetting referral requests on behalf of HMOs.
This is not a dispute among strangers. Knight and two Primary Care Associates board members have sent their children to Frumin for care. And Frumin is a major investor in Primary Care Associates.
State inspectors say it is not unusual for these kinds of disputes to become highly emotional.
"We're in an area in which two qualified persons can believe in their heart that their decision is the correct one," Donohue said. "They don't budge."