Empire Blue Cross and Blue Shield, New York, has agreed to pay $21.6 million to 52,000 subscribers after a federal judge ruled the insurer manipulated physician fee schedules to reduce reimbursement from 1989 to 1995, leaving patients to pay the difference. In a ruling last month, U.S. District Judge Thomas Platt in Central Islip said Empire had arbitrarily cut the "usual and customary charge" for doctors, to which reimbursement is linked under some plans, even though the rates are supposed to be determined by reviewing actual charges in specific geographic areas. The agreement is the result of a class-action lawsuit filed in 1995 by six New York plaintiffs. The fee manipulation dated to a time when Empire was struggling financially and had come under intense scrutiny from the state insurance department for its handling of claims. Current President and CEO Michael Stocker was recruited in late 1994 to turn around the company. -- by Laura B. Benko
Empire to pay $21.6 million for 'fee manipulation'
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