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Paul Zimmerman
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Physician Sues Blue Cross Over Narrow Provider Network

Some physicians find it quite challenging to gain acceptance into an insurer’s Covered California provider network. A few even take legal action to challenge the narrowness of such networks. For example, in a lawsuit recently filed in a California Superior Court, a Los Angeles dermatologist claims that Anthem Blue Cross intentionally restricts the number of physicians in its network in order to maximize its profits. The complaint alleges unlawful and unfair business practices, violation of common law fair procedure, and intentional and negligent interference with prospective economic advantage.

The case in question is LA Laser Center PC et al v. Anthem Blue Cross et al., case number BC 617436, and it will be closely followed by health care providers and insurers in California and throughout the country. At the center of the plaintiff’s allegations is the contention that Blue Cross deliberately limits its Covered California provider network and restricts patients’ access to health care solely for the sake of profit. Plaintiff argues that the insurer refuses to contract with, or even accept applications, from scores of physicians and other health care providers, not because they are unqualified but rather in order to restrict the size of the provider network and thus limit physician reimbursements.

Plaintiff alleges that, in October 2013, he asked Blue Cross to be allowed in its Covered California provider network, but was rejected without explanation. He attempted again in December 2015 and was turned down because Blue Cross wanted to preserve its “narrow network,” the complaint states. Plaintiff countered that if his dermatological practice was not allowed in the network, “there are no other dermatologists on panel within hundreds of miles in many of the communities that we practice,” claiming his patients will have no access to care. The complaint states that Plaintiff expressed his willingness to accept lower fees to be allowed in the network, to no avail.

Plaintiff accuses Blue Cross of engaging in “unethical, immoral, oppressive and unscrupulous” behavior by intentionally limiting its Covered California network such that patients lack reasonable access to quality medical care. Blue Cross contends that the facts do not support this allegation and that Covered California carefully reviews its exchange to ensure that provider networks afford patients access to quality care.

For some time, health insurers throughout the nation have faced lawsuits from subscribers challenging the narrowness of provider networks, but it is only in the past few years that we have seen a significant uptick in such lawsuits being brought by health care providers. M&R will closely monitor this case, and provide updates as appropriate.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.