Blue Cross Backs Off on Plan to Switch Doctors

Blue Cross members who receive care at clinics owned by MedPartners Inc. can continue to see their regular doctors, despite a letter from the insurer last week saying that all patients would be switched to new physicians.

The decision to allow members to see their MedPartners’ doctors came at the behest of state regulators, who issued a cease-and-desist order Friday after the health insurer unilaterally assigned its 118,000 MedPartners enrollees to new physicians.

However, Blue Cross has pressed forward with efforts to switch patients out of MedPartners’ clinics, which have lost hundreds of millions of dollars over the last several years but are not part of a takeover by state regulators.

Earlier this month, the California Department of Corporations, which regulates managed-care companies, took over MedPartners Provider Network Inc. and forced it into bankruptcy.

The provider network, a division of MedPartners Inc., an Alabama physicians practice management company, acts as a middleman between HMOs and physician groups. It serves 1.3 million Californians, most of them patients at MedPartners clinics.

On Tuesday, Blue Cross filed a request with the state for permission to assign new physicians to its MedPartners’ patients.

While the matter is being reviewed, patients will be allowed to continue to see MedPartners doctors if they wish.

“We wanted the patients to have access to a stable network,” said Blue Cross spokesman John Cygul.

In its request, Blue Cross said it decided to switch members out of MedPartners because “they were clearly facing risks regarding their health care.”

Indeed, Blue Cross painted a bleak picture of the MedPartners operation since the bankruptcy filing. The health insurer said:

* Several Blue Cross members had complained about difficulties in receiving care from MedPartners doctors.

* Some specialists declared that they would no longer provide care for patients in the MedPartners network.

* Physicians employed by MedPartners have advised Blue Cross that they plan to leave their jobs.

Blue Cross was particularly concerned that patient care would be disrupted because the clinics were not included in the state takeover and are therefore not under the protection of the Bankruptcy Court, Cygul said.

The Department of Corporations said that Blue Cross’ initial action violated state law because the insurer did not obtain approval from the state for the patient transfers.

State regulators and Eugene Froelich, the conservator appointed to run MedPartners Provider Network, welcomed Blue Cross’ action.