Arizona providers score a victory against insurers

Phoenix, AZ-Emergency physicians are cheering the Arizona State Supreme Court for refusing to hear a dispute between the state's Board of Medical Examiners and one of Arizona's largest insurers, Blue Cross-Blue Shield of Arizona.

At the center of the case is a debate over whether the state licensing board has the right to chastise the health plan's medical director for alleged misconduct. In refusing to hear the matter, the court tacitly handed a victory to physicians in their battle with payers over whether gatekeepers can deny coverage to patients for medical services without accountability.

The board had wanted to formally reprimand the medical director, John Murphy, MD, for refusing to authorize payment for a medically necessary gall bladder procedure. A trial judge and later an appeals court sided with the medical board in issuing the reprimand.

Murphy had refused to approve payment for the procedure, citing a lack of medical necessity. But the patient's physicians went ahead with the surgery anyway and later asked the board to investigate Murphy's conduct in the matter.

In it's ruling, the appeals court agreed with a trial judge that the medical board had a right to reprimand Murphy. But in a lawsuit filed against the board, Phoenix-based Blue Cross argued that the board had no jurisdiction over Murphy as an insurance employee and that he was answerable only to the state's department of insurance.

The health plan also objected to a "letter of concern" that the licensing board had planned to issue reprimanding Murphy for his actions. But the trial court rejected Blue Cross's efforts to appeal the board's decision, agreeing with the board that a formal reprimand was not appealable.

Although the case did not directly involve emergency physicians, it has large implications nonetheless, according to Todd B. Taylor, MD, an emergency physician at Good Samaritan Regional Medical Center in Phoenix. "It now puts the managed care medical director in the ED with us rather than in an office miles away," Taylor says.

The managed care industry saw the results differently. "This will have a negative impact and is likely to drive up costs to consumers," according to Gay Ann Williams, executive director of the Arizona Association of HMOs in Phoenix. Health plans have already begun to report difficulties in attracting physicians to fill jobs as medical directors, Williams says.