A new class action settlement between Independence Blue Cross and the Pennsylvania Orthopaedic Society will change payment practices for Philadelphia-area physicians in much the same way that Aetna's recent class action settlement with medical societies will for doctors nationwide.
The Philadelphia-based Blues plan on Friday will send notification of the settlement to some 25,000 physicians and other providers, according to company spokesperson Butch Ward.
The settlement, signed Thursday, still must be finalized by a judge on Aug. 21, both sides say.
Under the agreement, which ends lawsuits filed as early as 2000, Independence would disclose fee schedules and payment policies, change claims processing policies to comply with nationally accepted standards and guarantee a two-step internal appeals process for physicians' disputes with the plan.
While the agreement does not involve any direct payments to providers, Independence estimates providers will save $40 million over the next two years through changes in its claims processing policies.
Kathy DeWittie, spokesperson for the orthopedic society, says the group sued only Independence because it created the biggest problems, such as lacking a formal appeals process and often not paying for multiple procedures in the same surgery.
In a release, the society says charging for multiple procedures is "like taking your car to a mechanic because you need a new carburetor. While the car's on the lift, he discovers that you need a fuel pump. Do you get charged just for the carburetor or do they charge you for the fuel pump as well?"
Ward says the company's new payment policies will be based on various authorities, such as the Medicare Correct Coding Initiative and recommendations of the American Academy of Orthopaedic Surgeons and American Cancer Society.
"While IBC denies the allegations of the class action litigation, it has agreed to the settlement in order to avoid lengthy, complex and time consuming litigation," Independence says in a release.