Report From the States


Vernon L. Goltry, MD

On September 1, 1999, Regence BlueShield of Idaho announced a unilateral abandonment of a part of their contract with physicians and added a unilateral amendment without physician approval. On the first count they completely abandoned usual, customary, and reasonable reimbursement rates and secondly introduced the RBRVS system of payment, reducing physician reimbursement especially on surgical procedures by anywhere from 30 to 90 percent from the current, sharply discounted, fee schedule in existence. Their argument, of course, was that Idaho physicians were being paid more than any other physicians in the western part of the United States, especially for procedures; but they failed to acknowledge to the public, physicians, and patients the reason this had become so is because of the tremendous discounting of managed care in the rest of the western United States to the point where a projection of 90 percent of physician groups in California are destined for bankruptcy within the next two years or less. They also failed, of course, to mention that because of a similar situation as in California going on in Denver, Colorado physicians are declaring bankruptcy in droves and the entire medical care delivery system is in free fall.

Therefore, Regence BlueShield of Idaho used "managed care land" in the western United States as now the new standard. In California much of managed care was reimbursing physicians less than Medicaid and many California physicians report that Medicaid is the best payer in existence at this point in time.

As a result of Regence BlueShield of Idaho's blatant breach of contract with physicians, over 150 physicians became automatic non-participants. The game plan of Regence BlueShield was to increase reimbursement for non-procedural items Iike office calls, counseling, etc., and concentrate on procedure-oriented medical practices. This was clearly an attempt to maintain as high a participation rate as possible among physicians, so they could show numbers and for the most part this seemed to work.

The devastation to Regence BlueShield of Idaho's patient clients and patient-physician relationships has been severe. Ada County employees and many school districts immediately canceled their policies with Regence BlueShield and are looking for other medical coverage.

Idaho Power Company in their monthly newsletter to employees and their families libeled physicians by stating, "It is hard to feel sorry for doctors who charge anywhere from $50 to $150 for an office visit and whose main reason for being doctors may not only be to get rich but to get rich quick."

In a strongly worded letter to Idaho Power Company and the Boise Independent School District, the Idaho Medical Association (IMA) has challenged as a "disservice to the medical profession" recent statements made by Idaho Power in its employee publication and comments in a joint letter from Idaho Power and Boise Independent School District regarding the controversy between Regence BlueShield of Idaho and the state's physicians. IMA President Mark Spencer, M.D. says, "I am concerned, disappointed and outraged with the untrue inflammatory communications which do not give your employees helpful information."

The IMA's responses, were sent to Idaho Power's CEO Jan Packwood and Boise Independent School District Superintendent Ed Davis on January 25, 2000. Both Boise Independent School District and Idaho Power Company contract with Regence BlueShield to administer self-insured medical plans.

Professing concern about "access of our employees to participating surgeons, " they offer reimbursement of $2,500 for expenses associated with obtaining services out-of-state or in another community. Says Dr. Spencer, "Encouraging employee-patients to find other physicians in or out-of-state is not responsible advice and could put the health of those patients...your risk." Dr. Spencer also stated that, "Idaho Power and Boise Independent School Districts statements threaten the bond of trust that leads to sound medical care." The IMA is demanding that Idaho Power/Boise Independent School District withdraw these inflammatory statements and allow the IMA to tell the truth in their next published newsletters.

Physicians, unfortunately, rather than patients have declared a class action lawsuit against Regence BlueShield of Idaho challenging the violation by Regence BlueShield of Idaho's contract. Once again, a great majority of Idaho physicians do not see the importance of the one-on-one relationship between the physician and the patient in both delivering of health care and appropriate reimbursement. The pitfalls of physicians contracting with third party carriers is now glaringly evident in the State of Idaho.

Dr. Goltry is an otolaryngologist in Boise, Idaho, a former AAPS president, and member of the Editorial Board of the Medical Sentinel. His e-mail is:

Originally published in the Medical Sentinel 2000;5(3);109-110. Copyright©2000 Association of American Physicians and Surgeons (AAPS)