Physicians File Suit Against Regence

Suit in Response to Insurer's Select Network Imposed on SPEEA Members

Sep 21, 2006, 01:00 ET from Washington State Medical Association

    SEATTLE, Sept. 21 /PRNewswire-FirstCall/ -- Physician leaders of the
 Washington State Medical Association (WSMA) and representatives of the
 Society of Professional Engineering Employees in Aerospace (SPEEA)
 announced a lawsuit filed by the WSMA and physicians against Regence
     The lawsuit, filed on behalf of six physician plaintiffs and the WSMA,
 is in response to Regence's Select Network plan that affects over 8,000
 patients and their physicians. In May, the insurer sent letters to members
 of SPEEA (Society of Professional Engineering Employees in Aerospace) in
 the Puget Sound area stating that their physicians were lacking in the
 "quality and efficiency of their practices" which resulted in over 500
 physicians being dropped from Regence's Select Network.
     This lawsuit is in response to the insurer's defamatory introduction of
 its "high performance" network program and the serious flaws in the program
 -- a program that dropped physicians from Regence's network for SPEEA
 members -- our patients -- based on a flawed methodology and inaccurate
     "Our patients were justifiably outraged to receive letters from Regence
 saying their physicians were defective in quality," said Dr. W. Hugh
 Maloney, newly elected president of the WSMA.
     Examples of physicians who were dropped from the network for allegedly
 failing to meet certain quality and efficiency standards include:
    * A physician who failed to provide screening for cervical cancer on
    patients who had already undergone hysterectomies.
    * A physician who failed to provide mammography to patients who had
    already undergone bilateral mastectomies.
    * A physician who failed to provide diabetes treatment to individuals who
    do not have diabetes.
    * A physician who failed to provide treatment to individuals who were not
    even his patients.
     There are basic flaws in the methodology used by Regence to evaluate
 the "quality" and "efficiency" of physicians, according to the WSMA. Those
 flaws include:
    * Regence analyzed claims data only -- no medical records.  This
    improperly focuses on how much was charged, rather than the condition of
    the patient.
    * Old data.  In most cases the data used by Regence was over four years
    * Small sampling size.  Physicians were being "graded" on a relatively
    small sampling of billings, which may not be reflective of the physician's
    overall practice.
    * Patient population.  The analysis fails to consider the physician's
    patient population.  For instance, a specialist who is called upon to
    treat the most medically challenged patients is "graded" down because they
    need the most treatment.
     Stan Sorscher, Labor Representative of SPEEA, noted at the press
 conference announcing the lawsuit, "Regence's Select Network was an
 opportunity to bring tools and resources to care providers and encourage
 evidence-based medicine. Unfortunately they have failed at this endeavor."
     "The Select Network methodology, as implemented, interferes with the
 doctor-patient relationship and puts cost cutting ahead of better health
 care," added Sorscher. "If the program continues in its present form, it
 will undermine the credibility of evidence-based medicine and will be a
 step backward making real progress that much more difficult in the future."
     While Regence has agreed to postpone implementation of the program
 until July 2007, it has not demonstrated an effort to tangibly work with
 the WSMA and SPEEA in order to improve the program.
     "In meetings with Regence officials over the past few months, we have
 continually stressed the need for a program where clinical improvements can
 be achieved -- through good data, actionable data -- and by giving
 physicians the opportunity to respond to Regence's data," said Dr. Maloney.
 "The insurance company has failed to respond sufficiently to this request."
     J. Richard Creatura, counsel for the plaintiffs, stated that the
 lawsuit, filed in King County Superior Court today seeks an injunction
 against Regence to prevent it from implementing the Select Network Program.
 It also seeks money damages for the insurer's improper and inaccurate
 statements to patients that certain physicians failed to meet certain
 quality and efficiency standards.
     Added Dr. Maloney, "At the core of this matter is that true quality
 improvement programs need the active involvement of physicians to make sure
 the standards that are applied are fair, accurate, and do not unduly
 interfere with the doctor/patient relationship."
     The plaintiffs in the suit are six physicians, along with the WSMA,
 which represents over 9,000 physicians in the state. The causes of action
 addressed in the suit include:
    * Violation of the Unfair Business Practices Act (also known as the
    "Consumer Protection Act") RCW 19.86, which prohibits unfair or deceptive
    acts or practices in trade or commerce.
    * Defamation/libel.  Regence sent written notice to patients stating that
    their doctors were not providing quality care.  These statements were
    false and adversely impacted physicians.
    * Intentional interference with contract.  Regence fundamentally
    interfered with the doctor/patient relationship, which is based on trust
    and confidence.  This impacts the patients, as well as the physicians.
    * Breach of contract.  Regence has contracts with these doctors that give
    them certain rights, such as:
         --A promise by Regence that the providers will be allowed to provide
         medical care to Regence subscribers.
         --A credentialing procedure, that if Regence chooses to take away a
         physician's privileges, he or she has the right to appeal, including
         a judicial remedy.  By de-selecting them from this "Select Network,"
         Regence skirted this credentialing process.
         --An appeal procedure that by law provides physicians the right to
         dispute Regence's unilateral decisions.
     "Regence says its program is part of a nation-wide move toward
 evidence- based medicine, " noted Dr. Maloney. "Although everyone can agree
 on the goal of achieving high-quality, efficient medical care, this program
 does not achieve this goal and unfairly characterizes certain doctors as
 not meeting quality and efficiency standards when, in fact, they are
 providing excellent care for their patients."
     "Purchasers and insurers must be honest with patients. Is the objective
 to save money or to improve care? While these are not mutually exclusive
 goals, the order in which they are pursued is critically important. The
 Regence program is about cutting costs, first and foremost," said Dr.

SOURCE Washington State Medical Association