Blue Cross Accused of Predatory Pricing

BIRMINGHAM, Ala. (CN) - In a class action in state court, four medical groups accuse Blue Cross Blue Shield of monopolizing insured medical services in Alabama through its preferred medical doctor (PMD) requirements and "exclusionary" and "predatory conduct" designed to eliminate competition. The physicians say Blue Cross Blue Shield of Alabama controls 80 percent of the state's commercially insured residents.

The complaint in Jefferson County Circuit Court claims that Blue Cross Blue Shield of Alabama excludes physicians from practicing in the state by refusing to give them a provider number if they do not accept its underpayment.

Dr. David Williamson and four medical groups claim that saying no to Blue Cross, and refusing to accept the PMD status it requires, would mean financial ruin for hospitals and doctors.

The PMD requirement allows Blue Cross to reimburse "contracting" doctors at whatever rate it decides, according to the complaint. In Alabama, this rate is far lower than is given to doctors in other states and by other insurance providers.

The physicians particularly object to the reimbursement Blue Cross pays to emergency physicians in Alabama.

They say Blue Cross's "fee for service" is 54 percent lower than "reasonable commercial market reimbursement rates," and well below the national average for emergency room doctors.

Blue Cross is driving away many board-certified emergency room doctors, and has created a shortage of doctors that is "critically affecting" emergency health care in Alabama, according to the complaint.

Alabama has the lowest coverage ratio of board certified doctors to population of any Southeastern state, according to the complaint.

The medical groups seek punitive damages of $100 million for breach of contract and tortious interference with contractual relations. Plaintiffs include Dr. Williamson's Southern Medical Group, and North Alabama Emergency Physicians, Central Alabama Emergency Physicians and Physicians Emergency Services.

They are represented by Steadman S. Shealy Jr. of Dothan.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit