Originally created 11/29/00

Doctors win suit against Blue Cross

Blue Cross and Blue Shield of Georgia has been ordered to pay hundreds of thousands of dollars to an Augusta-based independent physicians association.

The Superior Court of Richmond County last week ruled in favor of the physician-owned CSRA Primary Care Associates Inc., whose lawsuit filed in October alleges Blue Cross engaged in fraudulent accounting practices and withheld guaranteed payments averaging $50,000 a month since June.

Charlie Harman, the insurer's vice president for public affairs, said the company will "continue to participate in the arbitration process."

"We believe our arguments are meritorious; therefore we are considering whether or not to appeal the ruling to restart the payments at this time," he said.

The dispute stems from a 1996 joint venture between the doctors and Blue Cross that provides service to more than 40,000 area Blue Choice Healthplan members.

Blue Cross began withholding a portion of the doctors' compensation earlier this year, claiming the joint venture, CSRA Healthcare Partners Inc., was losing money.

The physician group, however, argued the business had not lost money and is demanding, in a separate arbitration, a full accounting of the books and records.

"Blue Cross has concocted network operational deficits that the doctors contend don't exist," said Travers Paine, lawyer for the doctor group. "This is a substantial business - it's worth about $50 million a year in premiums."

Blue Cross contends its accounting is accurate.

"These financial records have been audited by Ernst & Young, and they agree with our view," Mr. Harman said.

Blue Cross owns 51 percent of the venture, and the physicians group owns 49 percent. The program started with about 10,000 HMO-covered patients in the Augusta area; today, it covers more than 42,000.

"When we negotiated a long-term deal with Blue Cross back in 1995, it was supposed to be mutually beneficial," Mr. Paine said. "Shortly after, Blue Cross decided they wanted out - without consent or compensation."

Physicians in the group continue to treat area Blue Choice Healthplan members.

"Our long-term interest is here in Augusta with our patients," said Gus Merkle, president of the doctor group. "We live here; we have families and homes here. Our doctors will run into you in a Winn Dixie, and we want to be able to look you in the eye."

Reach John Bankston at (706) 823-3352 or jbanks15@hotmail.com.


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