Last week I posted about the class action settlement between a large number of Blue Cross and Blue Shield affiliates and 900,000 physicians across the country. I was skeptical about whether the settlement, as reported by the Miami Herald, was a good deal for physicians and their patients. The money the Blues affiliates agreed to pay out looked large in the aggregate, but broken down to a per physician and per patient amount, it didn’t look nearly so impressive. I felt the key to whether the settlement is a good deal for the providers was whether the “important and valuable business practice changes” referenced in the article were real or illusory. I’ve now had a chance to take a look at the Settlement Agreement in the case and while I can’t say whether the Blues’ commitment to changing their business practices is a meaningful one, I can provide a bit more information as to some of the details of the deal. It is very long, over two hundred pages (and that is with me excluding 20+ signature pages), detailed and complex. I have posted it to the website library and you can read it here. But keep in mind that with the size of the PDF file, it will take a while to load and require some capacity. To begin, some overview points. First, the Settlement Agreement focuses on the contractual relations between the Blues and preferred physician providers. It does not directly affect the relationship between the Blues and non-preferred physician providers. Second, it does not directly affect the relationship between the Blues and either preferred or non-preferred facility providers. Finally, the Settlement Agreement does not bind patients. While they are directly impacted by the obligations their preferred physician providers agree to in the Settlement Agreement, they are not specifically bound by its terms. The details and nuances of the Settlement Agreement are beyond my ability to get into in this blog entry, but here is a non-comprehensive list of salient items the parties address in the Settlement Agreement. –The Blues will make available to all physicians, who are compensated on a non-capitated basis, complete information about the Blues’ fee schedule. The physician must agree to keep the information confidential. It will be provided without any precondition that the physician provide the Blues fee information about their own charges. ¶7.3. –The Blues will “attempt to limit” the number of services and supplies requiring precertification. ¶7.5. –The Blues will establish a Physician Advisory Committee to discuss issues relating to the relationship between the parties. These issues will include improvement of healthcare and clinical quality, improvement in communications, relations and cooperation between the parties and matters of a clinical or administrative nature that impact the relationship between the parties. ¶7.9. –The Blues will establish a billing dispute external review process to resolve disputes arising out of bundling, downcoding, application of CPT modifiers or other reassignments of codes by the Blues. If the dispute involves an amount of $1,000 or less, the physician must pay a “filing fee” of $50. For disputes above $1,000, the filing fee shall be $50 plus 5% of the amount above $1,000. However, if the physician prevails, he or she will be refunded the fee. ¶7.10. –With regard to disputes involving medical necessity or experimental/investigational procedures, the Blues agree to maintain both internal and external review processes. ¶7.11. The Blues shall also use the definition of “medical necessity” outlined in ¶7.16(a) of the Settlement Agreement. –The Blues agree to a multi-faceted framework for applying usual, reasonable and customary fee limitations so as not to unfairly reduce payment based on this type of exclusion. ¶7.14(d). –The Blues agree to disclose through its provider website or by comparable method the number of challenged claims sent to external review in the prior calendar year, and the percentage of those challenges that are upheld or denied. ¶7.16(a). –Clean claims must be paid within 30 days. Failure to do so will result in the Blues being required to pay 8% interest on overdue amounts or the penalty or interest amount required by the particular state’s prompt payment law. ¶7.18(a) & (b). --¶7.21 addresses what information the Blues will be required to include on EOBs and provider remittance advices. It is disappointing to see that, although the Blues agree to provide some information on these documents that is not specifically required under ERISA’s claims procedure regulations, some important information the Blues must disclose under those regulations are not referenced at all. I rarely see insurers provide provide all the information on their EOBs required under ERISA’s claims procedure regulations. We’ll continue to struggle to get the Blues to comply with the most basic requirements of ERISA on this point. –Certifications of medical necessity will not be reversed unless there is evidence of fraud, evidence that the information submitted was materially erroneous or incomplete, or evidence of material changes in the patient’s condition after certification and before the treatment is provided that makes the treatment no longer medically necessary. ¶7.25. The Settlement Agreement states in several places that nothing in the document shall restrict the obligations, rights and remedies physicians or patients have under ERISA. In some situations, the Settlement Agreement specifically defers to ERISA’s terms and procedures. It is also interesting to note that the Blues represent that from the time the class action lawsuit was filed until they put in place all changes to comply with the requirements of the Settlement Agreement, they will have spent over $250,000,000 to carry out their obligations. The parties estimate the value of the alterations the Blues have and will make exceeds that amount. ¶7.31. Disputes about compliance with the Settlement Agreement will be resolved by a jointly appointed compliance dispute officer. ¶12..1(b). He or she shall have the ability to resolve all disputes and the officer's decision shall not be reversed by a court unless it is an abuse of discretion. ¶12.6(g). The officer’s decision will be difficult to overturn. In addition, the Blues will be obligated to provide on a yearly basis a summary report with a list of information about their progress in implementing a variety of reforms outlined in detail in ¶7 of the Settlement Agreement. ¶12.8. The scope of the physicians’ release of claims against the Blues is very broad. It includes a “bar order” that obligates the physicians not only to release all claims they may have but also bars them from participating in or receiving any benefits they would otherwise receive from actions brought by non-releasing parties. ¶13.3. Reviewing the Settlement Agreement I’m impressed with the detail of some of the reforms the Blues agree to carry out. There is also a specific reporting mechanism to allow for monitoring of those reforms. How vigorously the physicians and their counsel hold the Blues' feet to the fire as to the specifics of the Settlement Agreement is the unknown factor. Likewise, the degree to which the physicians utilize the dispute resolution mechanism is not predictable. If the physicians do not remain vigilant and insist on the Blues living up to their obligations under the Settlement Agreement, very little will change.