Blue Shield, in Bold Move, Will Waive Specialist Referrals

Moving to address a major consumer complaint about HMOs, Blue Shield of California said Monday that it will allow members to go directly to medical specialists without a referral from their primary physician, if they pay an extra $20 fee.

By letting patients go directly to specialists--a first in California and rare among HMOs nationally--Blue Shield is abandoning a cornerstone strategy of health maintenance organizations for controlling medical costs.

Nearly all HMOs have adopted a rigid referral system that requires members to get prior authorization to see cardiologists, dermatologists and other specialists.

Health-care experts generally praised the San Francisco-based insurer’s aggressive move, which they said will probably be popular with consumers and employers. But they also said the plan is fraught with problems.

They questioned, for example, whether Blue Shield can control costs as well as its competitors when it grants members greater access to specialists, which cost more.

But Blue Shield representatives said the program should not significantly boost medical costs or lead to increased member premiums. Company actuaries have estimated a “minimal increase” in members’ use of specialists, officials said.

There was no immediate comment from competitors, but experts said Blue Shield’s move is likely to pressure other HMOs into easing some of their policies on specialist referrals. The new program goes into effect for Blue Shield’s 325,000 HMO members in California on Sept. 1.

“I think we’re going to see more of this in the future,” said Wayne Moon, Blue Shield’s chairman and chief executive.

The HMO industry has known for years that its limits on referrals to specialists are a major irritant for members. In some cases, patients complain of delays and red tape involved in seeing a specialist. And patients who are denied authorization to see a specialist may encounter a daunting bureaucratic maze if they decide to appeal the decision.

Surveys have found that anywhere from 15% to 25% of HMO members express dissatisfaction with their access to specialist care, Blue Shield said. With roughly 12 million Californians belonging to HMOs, that means up to 3 million dissatisfied people.

Blue Shield’s is perhaps the most aggressive move yet by a major health plan to address consumer frustration with HMO policies that can make it difficult to see a specialist or get a second opinion.

“This is one of the earliest examples of what the marketplace is forcing HMOs to do,” said Alan Katz, a principal of Centerstone Insurance, a large, Woodland Hills-based insurance broker. “Twenty dollars may still be a lot of money for some people. But for the peace of mind that your child’s illness has been looked over carefully by a specialist, most families would be able to find the money.”

Other HMOs have tried to address the problem by offering so-called point-of-service plans that allow members to see doctors outside the HMO’s approved network. However, these plans usually have significant deductibles--$250 or $500--and only partially reimburse members for out-of-network medical costs once the deductible is met. Also, premiums for point-of-service plans typically are 10% to 15% higher than regular HMOs.

Blue Shield representatives and others said the insurer is the first California HMO to waive the requirement for referrals to specialists. However, United HealthCare Corp., a big HMO based in Minnesota, offers such a plan, which the company says is its fastest-growing product.

Under the Blue Shield plan, patients can refer themselves to a specialist by making a $30 “co-payment” to the doctor. That’s $20 more than Blue Shield’s usual $10 co-payment. Members would be allowed an unlimited number of self-referrals, company executives said.

However, Blue Shield members can only refer themselves to a specialist within their chosen medical group; they won’t be free to pick any Blue Shield doctor or specialists outside the company’s network.

Members also won’t be allowed to self-refer for laboratory tests or surgical procedures. Such treatments would still need prior authorization from a primary-care doctor or specialist, the company said.

Blue Shield representatives said the program will be offered to nearly all of California HMO members and that member premiums will not be raised.