A urology center in Macon, Ga., has filed a class action lawsuit against Blue Cross and Blue Shield of Georgia after the payor cut its out-of-network reimbursement rates by 80%.
The suit, filed on April 29 in U.S. District Court in Macon by the Urology Center of Georgia, claims that in January 2007, the state’s largest health benefits provider cut reimbursement rates by 80% for out-of-network providers. The new rates are far below customary and reasonable charges that the payor is contractually obligated to pay, according to the lawsuit.
The Urology Center of Georgia is suing under the federal Employee Retirement Income Security Act (ERISA) on behalf of all Georgia surgery centers that provide out-of-network services to patients insured by BCBS of Georgia. BCBS of Georgia "slashed reimbursement for out-of-network surgery to levels far below the UCR charges associated with such care to prevent or deter its enrollees from receiving out-of-network care at facilities," says the lawsuit.
The plaintiffs are seeking monetary damages, an injunction and recognition that the BCBS of Georgia is paying out-of-network providers well below usual and customary rates, according to the lawsuit.
"The allegations in the complaint are without merit," said Cheryl T. Monkhouse, spokeswoman for BCBS of Georgia, in a statement, adding that the payor "intends to defend the suit vigorously." The statement also said that the payor’s reimbursement rates are "protecting its members and group customers against excessive charges by some non-participating providers."
The federal lawsuit was also filed on behalf of patients enrolled in BCBS of Georgia’s PPO and POS plans. "They paid extra so that they can go out-of-network," says attorney Leigh May, of Butler, Wooten & Fryhofer in Atlanta, who is representing the plaintiffs. Kenneth Son, MD, of the Urology Center of Georgia, was not available to comment on the suit, says Ms. May.
This is not the first time that BCBS of Georgia has been sued for cutting out-of-network rates. In January 2008, National Renal Alliance, now part of Renal Advantage Inc., of Brentwood, Tenn., sued BCBS of Georgia after it cut out-of-network dialysis reimbursement by 88%. However, in February 2009 a federal judge dismissed most of the claims against BCBS of Georgia because the rate cuts did not apply to Medicare Secondary Payer Act, the law under which National Renal Alliance based its complaint.
Ms. May said that the case is now in the discovery phase and could last a couple of years. No trial date has been set.
—Kent Steinriede
