An ongoing battle over late payments between a group of Tampa, Fla., orthopedists and Blue Cross and Blue Shield of Florida is heating up and could open a new and contentious chapter in provider-health plan relations.
The Bay Area Orthopedic Network's 43 physicians are suing the Blues' Health Options for back pay and charging the HMO with, among other things, breach of contract, fraud and racketeering. The suit also names Health Options' medical director and contract negotiator as defendants, and charges the two deliberately avoided paying doctors to increase their own bonuses.
The suit alleges a pattern of criminal activity under Florida's anti-racketeering law. Late last month, the U.S. Supreme Court ruled that insurers could be sued under the federal Racketeer Influenced and Corrupt Organizations Act, which could subject insurers to greater penalties than under state insurance laws.
The Blues had no comment but did file a motion for dismissal, which a Hillsborough County (Fla.) Court judge is considering. A decision is expected early this month.
According to Jay Wolfson, the physicians' attorney, the orthopedists agreed to a risk-sharing arrangement with Jacksonville, Fla.-based Health Options in 1995.
The agreement included annual withholds and bonuses to be paid at year-end if the physicians met certain utilization, cost and quality objectives.
In October 1997, Health Options agreed to base the withholds and bonuses for 1996-1997 on the same formulas as the previous year and agreed to pay the amount due -- almost $308,000 -- on Jan. 3, 1998. The parties did not sign a contract, but Wolfson says the letters the Blues sent to the physicians reflected "clear verbal agreements."
"We believe there are incentives that exist within the organization for the managers to stall on the payment or avoid payment altogether when it comes to paying doctors and hospitals," Wolfson says. "If they're successful in doing that, they may get their bonuses increased."