A lingering U.S. Justice Department investigation has left Blue Cross and Blue Shield of Massachusetts' Medicare risk HMO withering on the vine as frustrated providers leave for greener pastures.
Enrollment in the plan, called BlueCare 65, has been frozen since March 1996, when HCFA ordered marketing and sales suspended after a Blues employee allegedly filed false records involving contracts with physicians.
That resulted in a HCFA investigation but also triggered a probe by the Justice Department that's still open, said Sidney Kaplan, regional administrator for HCFA in Boston.
Frustrated by 18 months in limbo, a key provider organization serving BlueCare enrollees has pulled out of the program, affecting about 15% of the enrollees.
The decision of Partners HealthCare System to terminate its agree-ment affects the 1,500 Medicare enrollees who receive care from Massachusetts General Hospital and Brigham and Women's Hospital, two prestigious Boston teaching hospitals around which the Partners network is organized.
BlueCare enrolled 11,000 seniors in the few weeks between HCFA's clearance to operate and its order to suspend sign-ups. About 10,000 remain in the plan.
Susan Leahy, a spokeswoman for the Boston-based Blues, said the company sent HCFA the records it requested a year ago, after which HCFA turned the records over to the Justice Department.
Kaplan said the Justice Department action, not HCFA's original probe, is now the issue preventing the Blues plan from being reactivated. "So long as there continues to be an ongoing investigation regarding its actions, we would not lift the sanctions," he said.
HCFA is waiting for the Justice Department to settle the case, press it in court or drop the investigation. "My sense is there'll be a settlement; while not exactly imminent, it's not too far down the road," Kaplan said.
A resolution may not clear up the troubles with HCFA, however, now that the Partners network is out of the picture. "Partners provided a lot of physicians who underpinned the provider network that BlueCare 65 held itself out to have," Kaplan said.
HCFA will have to re-evaluate the remaining network to see if it's adequate in all parts of the state, he said. If not, the plan may be cleared to resume marketing but not in every county.
Partners had agreed to split its business between BlueCare and Secure Horizons, the Medicare HMO launched by Tufts Health Plan, said Ellen Zane, chief executive officer of the Partners subsidiary that's developing a regional physician network.
Tufts operates Secure Horizons through a licensing agreement with PacifiCare Health Systems, the Cypress, Calif.-based managed-care company that created Secure Horizons.
But doctors were frustrated with the dormancy of the Blues business while other HMOs were seeking to negotiate for medical services in the last untapped market for managed care in Massachusetts, she said. HCFA said the state has between 900,000 and 1 million Medicare beneficiaries. Of those, 176,000 were enrolled in Medicare risk plans on July 1.
Reimbursements from Waltham, Mass.-based Tufts contain incentives that include higher payments to physicians participating exclusively in Secure Horizons, less for splitting business with another HMO and still less for dealing with several plans, Zane said.
So although Partners isn't prevented from remaining with BlueCare while it negotiates with other HMOs actively marketing Medicare products, "it's in the doctors' interest to be more selective," she said.
BlueCare enrollees have until the end of October to switch to another plan or go back to a fee-for-service Medicare arrangement if they want to keep their Partners providers, Zane said. Exceptions may be made beyond that date for enrollees delayed in making the switch because of extenuating circumstances, she said.
Leahy said the Partners pullout won't impede Blues efforts to attract and serve Medicare enrollees. "Massachusetts General and Brigham and Women's are world-class hospitals," she said, "(but) they're not the only world-class hospitals in Boston."