On Dec. 6, 2004, San Diego Superior Court Judge William Nevitt granted American Specialty Health Plans (ASHP) summary judgment on several key claims filed in a lawsuit against ASHP by the California Chiropractic Association (CCA), effectively quashing the association's attempt to make ASHP alter some of its business practices toward doctors of chiropractic who enroll in the company's provider networks.
"CCA is obviously disappointed with much of the court's ruling," said the association's president, Dennis Buckley, DC.
"Despite the court ruling, we continue in our very strong belief that many of ASHP's operating practices are illegal, and that they effectively serve to negatively impact an insured person's ability to access desired chiropractic care."
In June 2001, the CCA filed a lawsuit against ASHP and its parent company, American Specialty Health Networks, Inc., claiming numerous violations of the California Business and Professions Code. In its suit, the CCA alleged that ASHP participated in a variety of illegal business activities that were "damaging the entire chiropractic profession," including:
- systematically denying DCs who participate in ASHP's chiropractic networks the authorization to provide medically necessary chiropractic services to members of ASHP's chiropractic health plans - and denying them the opportunity to be paid for such services;
- systematically refusing to compensate participating DCs for medically necessary chiropractic services rendered;
- systematically and arbitrarily withholding monies from doctors of chiropractic under the guise of deceptive and misleading contract provisions;
- systematically reducing reimbursement rates to DCs below reasonable levels; and
- terminating doctors of chiropractic from ASHP provider panels without cause.
"When ASHP started up, it hurt those of us not contracted with them," said then-CCA President Robert Dubin, DC, when the suit was filed. "I personally lost significant numbers of patients, but as a profession, we hoped ASHP would be a benefit to patients and doctors." He added at the time that the CCA had moved forward with the lawsuit "to ensure that doctors of chiropractic and their patients are treated fairly by ASHP."
The suit was filed not only over concerns the CCA had expressed, but also due to concerns about ASHP's seeming monopoly over the delivery of chiropractic services in the managed care setting. Figures obtained from the California State Department of Managed Health Care showed that in March 2001, ASHP had more than 3.9 million enrollees for chiropractic managed care coverage. All other chiropractic specialty plans combined had less than 342,000 enrollees, giving ASHP approximately 92 percent of all enrollees receiving chiropractic care through a specialty plan physician/gatekeeper managed care model.
Despite the high percentage of enrollees, the percentage of chiropractors enrolled in ASHP's provider network at the time the suit was filed was considerably lower. In an interview published in the July 30, 2001 issue of Dynamic Chiropractic, ASHP CEO George DeVries stated that "about 2,200 providers" were under contract with the company, out of approximately 10,000 licensed chiropractors in the state. He added that in the year 2000, as much as one-third of all patient treatment plans submitted by participating chiropractors for approval were either completely denied or only partially approved; however, he provided few details as to how and why treatment plans were approved or denied.
American Specialty Health originally attempted to have the suit thrown out, but in December 2002, an appellate court ruled in favor of the CCA, allowing the litigation to continue. Despite this early victory for the CCA, ASHP eventually prevailed in having the court grant summary judgments against most of the CCA's claims. As we go to press, 15 of the 18 claims asserted by the CCA have already been ruled in ASHP's favor.
In issuing its most recent ruling, the court noted that CCA failed to produce any evidence that ASHP's utilization management practices were "arbitrary" or "contrary to generally accepted professional/medical standards." With regard to reimbursement rates, ASHP provided evidence from the California State Department of Managed Health Care, which showed that its reimbursement rates for doctors of chiropractic were "reasonable in relation to industry practices." As a result, the court ruled that there was no reason it should interfere with ASHP's provider reimbursement schedules, denying CCA's claims for injunctive and monetary relief.
The court also ruled that the CCA failed to provide any evidence that ASHP had terminated without cause in the past seven years, voiding the association's claim that ASHP's termination practices were unfair and unlawful. In addition, the court found that a CCA claim challenging a decision by ASHP to limit acceptance of chiropractors in the network to a specific number of DCs within a particular area could not be sustained.
Although the CCA's case against ASHP appears to be on its last legs, the association has vowed to keep fighting for the rights of chiropractors and the patients who seek their services:
"We knew when we launched this action in 2001 it would take a long process," admitted Dr. Buckley. "We are prepared to continue this cause for as long as it takes, on behalf of the public seeking chiropractic care and doctors of chiropractic."