HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that Blue Cross of California is implementing incentives and penalties to its PPO network providers based on where certain elective procedures are performed, much to the dismay of the California Hospital Association. According to the latest California Health Plan Analysis, Blue Cross is paying physicians a 20 percent reimbursement bonus to perform colonoscopies and other elective endoscopies in an ambulatory surgical center, and also docking payment by 5 percent for those procedures performed in a hospital setting.

"According to Blue Cross, clinical data of colonoscopies performed on its members shows no discernable difference in quality based on the medical setting," states Chris Lewis, HealthLeaders-InterStudy research analyst. "With a significant cost difference between ASCs and the hospital setting, Blue Cross is hoping to control costs both for the plan and its members."

The California Hospital Association, representing about 400 hospitals in California, claims the health plan has violated numerous provisions of the state's Insurance Code and Knox Keene Act that make it illegal to provide financial incentives to reduce, deny or limit services. The group was unsuccessful in an attempt to block the new policy when a Los Angeles County judge refused to issue a temporary injunction against Blue Cross.

In his August 1 ruling, Superior Court Judge Carl West stayed legal procedures on the CHA lawsuit for 60 days to give the state Department of Managed Health Care time to advise him of its position.

  Other news in the California market:   * UnitedHealthcare, in negotiating its own contracts in the wake of its     Pacificare merger, has so angered California physicians that the     California Medical Association is publishing a 'survival kit' to help     members.    * Governor Arnold Schwarzenegger, having vetoed a bill calling for a     single-payor state government plan and the state's pay-or-play bill, is     now promising his own healthcare reform plan-next year, after the     election.    About Health Plan Analysis 

Health Plan Analysis identifies key health plan trends, allowing healthcare businesses to create comprehensive strategic plans and sales strategies at state and local levels.

About HealthLeaders-InterStudy

HealthLeaders-InterStudy, a company of Decision Resources, Inc., is the authoritative source for managed care data and analysis.

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

  For more information, contact:   Kelly Morphy   HealthLeaders-InterStudy   615-369-4818 

SOURCE: HealthLeaders-InterStudy

CONTACT: Kelly Morphy, HealthLeaders-InterStudy, +1-615-369-4818,

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