The Bigger Picture: Love Lost

March 1, 2009

A settlement has at last been reached in a long-fought lawsuit between physicians and insurers. But the outcome of the so-called Love case is at best a modest win for doctors.


It’s frustrating. And bad for physician-payer relationships. Who wants to be bullied?

A new organization - the Billing Dispute External Review Board (BDERB) - is offering hope, but it doesn’t address the real disputes between payers and physicians.

Here’s the back story: In April 2007, Blue Cross and some other commercial payers agreed, under court pressure, to change some unfair business practices. The so-called Love Settlement stipulates, among other things, transparency in fee schedules, compliance with realistic medical necessity standards, and time limits for credentialing reviews.

The settlement also required some Blue Cross Blue Shield plans to set up an external review for disputed claims. (You can see a list of which plans are included and learn more about Love by visiting the HMO Settlements Web site.) The idea is to give physicians an objective place to go if they think the payers aren’t playing fair. The Blues finally got it done a few months back. Practices are just starting to use the review system.

So, now, if you meet certain criteria - like having already gone through the usual steps - you can (for a fee) submit your payer dispute to this putatively objective third party.

Great, right?

In some ways, yes. Though it’s very far from perfect, the settlement does offer some legit benefits to practices, such as faster credentialing requirements. At least some folks in the court system are looking out for practices, and I do wonder why, given this significant victory, I’m not hearing more about it from physicians. Are we so jaded we can’t celebrate success? Or just so busy we don’t notice?

But the Love Settlement, while a step forward, is hardly a solution to what ails the system. The external review process, in particular, is deeply flawed. The reviews will focus on the denied claims, not the policy behind the denials. And it’s the policy that is really at stake in physician complaints about payers.

Payers make up rules to suit themselves, then change them whenever it’s to their benefit, which is frequently. None of that has changed.

A Blues plan can, for example, still decide to stop paying for vision exams along with an E&M visit and instead bundle the two services. It doesn’t matter that the physician is doing two services for the price of one. A physician following the appeal process “will pay for the privilege of the second level of appeal and the adjudicator will just say, ‘Yes, you were denied properly based on the policy,’” complains Suzanne Madden, a consultant and expert in managed care conundrums. “They missed the boat on what physicians can actually appeal with this.”

Physicians can’t get what they see as irrational, unfair policies changed. They can only make sure the payers are abiding by those irrational, unfair policies.

The limits of the appeal, and its price point, are especially troublesome given the problems most physicians have distinguishing the causes for denials. Most physicians believe in basic fairness: They have provided a service, and if they just make it clear what happened, they should get paid. But the payer is not applying that logic; it is simply abiding firmly to policies that it created for its own benefit.

Now, in fairness, I don’t see why payers should let physicians set the rules about why and when and how much they should get paid. But there should be some opportunity for discussion, some third-party determination of what makes sense for all parties when a policy becomes contentious. Otherwise the kinds of disputes that led to the Love Settlement in the first place will just continue. The anger and frustration continue. The confused appeals continue. And it’s a shame and a waste.

Pamela L. Moore, PhD, is director of content and strategy for Physicians Practice. Tell her what you think at forum.physicianspractice.com.

This article originally appeared in the March 2009 issue of Physicians Practice.