CA bars Blue Cross of CA from demanding fee confidentiality

Capping a year of disputes between the health plan and its providers, the state of California has ruled that Blue Cross of California may not force physicians, hospitals and labs to sign a confidentiality agreement preventing them from discussing fee negotiations. Of late, providers have vigorously resisted the requirement, complaining that the agreement prevents them from using lawyers and outside consultants to represent them in rate negotiations. They also say that those of their brethren who have refused to cooperate stop getting patient referrals. Blue Cross, for its part, argues that its rules do not prevent the use of consultants, but instead, simply prevent consultants from sharing its data with other providers or competitors.

Now, the state's Department of Managed Health Care (DMHC) has issued a cease-and-desist order barring the health plan from imposing this requirement during contract talks. Officials there issued the order after several hospitals--including sixteen whose contracts expired at the year's end--said they'd drop their Blue Cross relationship rather than follow the health plan's rules. DMHC director Cindy Ehnes has said that the agency took action, in part, because with Blue Cross being the largest insurer in the state, it's not a good idea to let it have so much leverage over providers. "We simply can't have a one-sided, take-it-or-leave-it bargaining agreement," she said.

To learn more about the controversy:
- read this Los Angeles Times article

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