ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, March 2, 1996 TAG: 9603040019
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: Associated Press BIRMINGHAM, Ala.
A federal judge sided with Blue Cross and Blue Shield of Alabama in a ruling described as a victory for managed health care companies that limit patients' choice of doctors.
Blue Cross is exempt from a 1994 state law requiring it to pay for medical care by doctors, dentists, pharmacists and others even if those health care providers are not in the insurer's network, U.S. District Judge Seybourn H. Lynne decided.
The ``any willing provider'' law says health plans must pay claims at the same rate for providers both inside and outside its network.
The decision, released Jan. 31, had gone largely unnoticed, but strikes at the heart of efforts by those who want to prevent HMOs and other managed care companies from forcing patients to see only their preferred doctors.
Managed care companies use their own networks of providers to monitor their care and restrict treatment they consider wasteful. They contend that any willing provider laws undermine their efforts to control costs.
Blue Cross spokesman Jim Brown said the nonprofit corporation, Alabama's largest health plan, stood to lose $300 million in one year if subjected to the law's requirement.
Blue Cross attorney Chris Kimble said Lynne's ruling applies to virtually all insurers providing group health coverage in Alabama.
``It is probably one of the most significant managed care cases,'' Kimble said. ``People have been watching it all over the nation.''
The executive director of the Alabama Dental Association, part of a coalition of medical groups that opposed Blue Cross in court, said the ruling means patients will be unable to see the doctor of their choice.
``That is why we definitely will appeal,'' said Wayne McMahan.
Blue Cross provides health coverage for more than 2.1 million people in Alabama. It filed the suit, claiming an exemption from the state law because it is governed by a federal law that regulates employee health plans, the Employee Retirement Income Security Act, or ERISA.
The Blue Cross attorney said virtually all group insurers are covered by ERISA. That means they, too, would be exempt from the state requirement.
The law ``had the ability potentially to destroy managed care in Alabama,'' Kimble said. Barring a successful appeal, the industry can now continue growing.
``It is inevitable that it is going to come. Some management has to occur if there are going to be benefits for anyone,'' said Kimble.
LENGTH: Medium: 52 linesby CNB