Home / Articles / Features / Feature / Playing for keeps
Print this Article
Thursday, Jan. 5, 2006 06:01 pm

Playing for keeps

When Health Alliance sued, these doctors went to war

art2728
COVER PHOTOGRAPH BY NICK STEINKAMP
This must be some kind of joke, Dr. Glennon Paul thought as he read the missive from Health Alliance. In the letter, sent six years ago, Dr. Jon S. Rahman, the health-maintenance organization’s chief medical officer, accused Paul and two of his colleagues at Central Illinois Allergy and Respiratory Services of receiving “overpayments” from Health Alliance and providing inappropriate care to patients covered by the Urbana-based health insurer. There was, Rahman wrote, a “pattern of excess charges” from CIARS. In polite terms, Rahman was accusing Paul and his partners of fraud, and Health Alliance wanted more than $2.1 million of its money back. The letter sounded ominous, as if more trouble was brewing. “We consider this matter confidential and hope it can be resolved in an amicable manner,” Rahman wrote, urging Paul to get in touch immediately to discuss a payment plan. “We are, though, bound to inquire further into the allegations concerning patient care.”
After more than three decades as a physician, Paul’s reputation and livelihood were at risk. Besides ripping off an HMO, he and his colleagues were being accused of putting their financial interests ahead of what was best for patients.
“I was kind of dumbfounded — I didn’t believe it,” Paul recalls. “I thought, ‘Something’s wrong here.’ Then they called a few weeks later and asked how much I was going to settle for.” At that point, Paul realized, this wasn’t a misunderstanding that would just go away. Even though he insists that he and his colleagues did nothing wrong, Paul says that he offered to pay the HMO $50,000 to drop the matter — it would be cheaper than hiring a lawyer. Health Alliance said no, and so Paul decided to fight. A half-dozen years later, he’s finally able to declare victory. But it wasn’t easy, nor was it cheap. In the end, the HMO paid Paul and his colleagues, not the other way around. But, really, only the lawyers won. The clinic spent nearly $800,000 fighting Health Alliance, which spent more than $1 million on attorneys and experts, according to an attorney for the respiratory clinic. Had the money been spent on health care, many lives could have been saved or prolonged — for instance, the legal expenses were enough to cover lung-reduction surgery for more than 20 emphysema patients. But CIARS had no choice. “Their practice was at stake,” says Mark Smith, lawyer for Paul and his colleagues. “They put it all on the line.”
In legal briefs, Smith accuses Health Alliance, which partners with Springfield Clinic to run the HMO in the Springfield area, of trying to put the respiratory clinic out of business with false claims of fraud and inappropriate patient care. If the 30-year-old clinic had gone down, there would have been more business for doctors at Springfield Clinic, who compete with Paul and his colleagues. Health Alliance makes no apologies after a resounding legal loss, and it flatly denies that its legal battle was based more on the dynamics of the Springfield medical market than on bona fide fraud claims. “Sometimes even good cases are lost,” says Jane Hayes, a Health Alliance spokeswoman. But Paul says that this was all strictly business, cutthroat to the core. “When I got this doggone lawsuit, I thought, ‘Doctors would never do this — it has to be administrators,’ ” he says.
In business since 1975, Central Illinois Allergy and Respiratory Services already had plenty of patients when it became part of the Health Alliance network in 1995. The HMO, on the other hand, didn’t have an allergist on its provider list in the Springfield area, Paul and his colleagues say. “They needed us — we did not need them,” says Dr. Donald Gumprecht, who joined the clinic in 1990. “My counsel to Dr. Paul was ‘Don’t join any HMOs. It’s not worth the headaches.’ We’re honest physicians who just want to be left alone. If we do a good job, our patients are going to find their way to us.”
But Paul, as head of the clinic, didn’t listen. “We were just babes in the woods,” he says. “It was just another way to practice medicine. We had no idea this crap was going to happen.”
The clinic, located near Memorial Medical Center on Miller Street, includes a half-dozen physicians and has its own laboratory and X-ray department, so patients who might otherwise go elsewhere for blood tests and X-rays can be evaluated and treated in-house. A single doctor can act as a patient’s primary care physician, pulmonologist, and allergist. Furthermore, the doctors say, their average patient isn’t insurable, except through employer-provided plans, as a result of chronic respiratory illness — their patients are sick enough that they’d be rejected if they tried to buy insurance on their own. The array of in-house services and the severity of their patients’ conditions may add up to higher-than-average charges in the complicated matrix of HMO cost-control analyses, the physicians say, but the bottom line is, they save insurers money by not referring patients to outside specialists or hospitalizing them for treatments that can be provided in the clinic.
Before signing a contract, the doctors say, they made it clear to Health Alliance that they often charged more than other physicians for patient visits and that they would not change their ways to suit the HMO. Paul gave a top Health Alliance administrator a tour of the clinic to show him rooms where patients received intravenous treatments that are typically administered in hospitals. “If Health Alliance did not like what it was told, it should have chosen not to proceed,” Smith, their lawyer, writes in a legal brief. “But instead, Health Alliance, along with Springfield Clinic . . . chose to move forward.”
Springfield Clinic is closely tied to Health Alliance, which keeps 15 percent of the premiums collected from Springfield-area members of the HMO to pay administrative costs. The remaining 85 percent is split between Springfield Clinic and Memorial Medical Center. All treatment costs must be paid from the 85 percent that remains after Health Alliance takes its cut. If health-care providers got paid more than that, then Springfield Clinic took a loss. If the total amount spent on patients was less than 85 percent of premiums collected, Springfield Clinic made a profit. In short, Springfield Clinic bore the financial risk — Health Alliance would collect its 15 percent of premiums no matter what. “Anything they’re paying to us is a true loss [to Springfield Clinic],” Gumprecht says.
Perhaps that explains why Mark Kuhn, a top administrator for Springfield Clinic, attended the eight-day arbitration hearing during which the dispute was ultimately resolved. Gumprecht and Paul say that no Health Alliance employee observed the proceedings for any appreciable amount of time. Kuhn was also in charge of determining the amount that Health Alliance claimed that Paul and his colleagues had overcharged for services, the HMO acknowledges in legal briefs outlining how its case was prepared. No one directly involved in the case on Health Alliance’s side is eager to talk. Kuhn declined comment. “I couldn’t really offer any good input,” he says. “You should talk to someone with Health Alliance.” David Bennett, one of Health Alliance’s lawyers, denies that the HMO was trying to limit competition, but he refuses to answer most other questions, saying that’s a job for a Health Alliance spokesperson.
Bennett questions the public’s right to know about the case, even though Health Alliance is the biggest HMO in the Springfield area and its members presumably have an interest in knowing whether their insurer is providing cost-effective health coverage. “This is a private proceeding,” Bennett answered when Illinois Times asked questions about the case. “Where do you get this information?”
In legal briefs, Health Alliance argues that its contractual relationship with Springfield Clinic is irrelevant. “We would not pursue legal action to reduce medical competition in any market — this was purely a quality-of-care issue,” says Hayes, the Health Alliance spokeswoman. As for why Kuhn, rather than a Health Alliance employee, observed the arbitration proceedings, Hayes answers, “I believe he was there because we have a very close relationship with Springfield Clinic.” From the very beginning, Health Alliance says, it lost money in its dealings with the respiratory clinic. In legal filings, the HMO says that the amount it paid Paul and his colleagues nearly tripled between 1995 and 1999. At the same time, the HMO says, its losses on CIARS patients climbed from $227,816 to nearly $1.2 million.
Over the years, Health Alliance occasionally questioned charges, the doctors say. Each time, they sent letters to Health Alliance explaining their charges and heard nothing back. “When they ignored these letters, I assumed they thought I was golden,” says Gumprecht, who still has copies of correspondence that ended up as exhibits when the HMO sued. “There is no question that through either intentional acts or reckless disregard for the truth, Health Alliance and Springfield Clinic lulled the Respondents into a false sense of security, only to make them victims of what was a deliberate fraud aimed at removing them as a competitor in the region,” Smith writes in a legal missive. Once Springfield Clinic recruited other allergists and pulmonologists who could care for the HMO members, Health Alliance made its demand: Pay up or else. “They wanted to know what we were going to do,” Paul recalls. “I told them we were going to get an attorney.”
After Health Alliance sued, auditors from Medicare, Blue Cross, United Healthcare and state public aid combed through the clinic’s records, looking for overcharges and examples of improper treatment. “I got four audits within six months,” Paul says. “I never was audited before. What’s going on here? Do you believe in coincidences?”
The other insurers found nothing serious. They demanded no refunds and kept doing business with the clinic. Health Alliance, however, pressed on, claiming that the clinic’s doctors had overbilled for office visits, administered unnecessary flu shots, taken sinus X-rays that weren’t needed, performed inappropriate laboratory tests, and subjected patients to IV treatments with steroids and other substances that weren’t necessary. “Respondents ran a medical ‘mill’ and ran patients through, giving them the ‘full treatment’ in circumstances where the procedures were not warranted,” Health Alliance lawyers wrote in one legal brief. The lawyers labeled some of the treatments “potentially dangerous.”
Had any of the allegations been upheld, Paul says, he and his colleagues could have been ruined. Every insurer, he says, routinely asks whether a doctor has been found guilty of overbilling or providing inappropriate treatment, and no one wants to deal with a crook. “If we had to pay it back, we’d be in trouble with the 38 or 40 other insurers we do business with,” Paul says. “We had to win.”
The clinic lost the first round, a request to have the dispute decided by a judge or jury in Sangamon County Circuit Court. Under the terms of the clinic’s contract with Health Alliance, the matter had to go before an arbitration panel consisting of three lawyers. It was a one-shot deal: Whatever decision arbitrators reached could not be appealed. Time and again, Paul refused settlement offers. “They picked a fight with the wrong guy,” Smith says. “The writing was on the wall very early with him: He was determined to vindicate himself and his partners and his practice. He dug his heels in and said, ‘I believe in the way I treat my patients.’ They [Health Alliance] wanted to settle the case all along. One of their constant refrains was, we were making too big of a deal out of it, this is supposed to be arbitration, we’re supposed to be saving time and money.”
Health Alliance eventually lowered its demand from more than $2.1 million to nearly $1.4 million. At one point, Paul says, Health Alliance offered to settle for $1.9 million, which included some of the HMO’s legal costs. To make its case, Health Alliance retained a statistician and three doctors, who examined 100 charts and extrapolated conclusions about the 2,256 HMO members who received services from the clinic. Health Alliance used bellshaped curves and averages to calculate damages. Trouble was, Paul says, the 100 patients in the Health Alliance sample were among the clinic’s sickest customers. To prove the HMO wrong, Paul personally combed through charts and billing records covering more than 100,000 patient visits. “We didn’t have a business manager,” he says. “We had to do everything ourselves.” Paul estimates that he worked between 10 and 20 hours a week for three years. “He went all-out,” Smith says. “We had boxes and boxes of medical charts — I’ve never seen so much paper. He wanted to show the arbitrators the truth, why the clinic’s approach makes sense and why they do what they do.”
He succeeded. Nearly a year ago, the arbitration panel unanimously ruled in the respiratory clinic’s favor and also granted a counterclaim, awarding Paul and his colleagues nearly $76,000 that the panel ruled the HMO had wrongly withheld as payments for services. The icing on the case came two weeks ago, when arbitrators awarded the respiratory clinic $535,000 in legal fees. “They made us as whole as they could make us,” Paul says. Despite the legal ordeal, Paul and his partners remain steadfast. “You cannot be influenced by the insurance companies on what kind of care to give,” Paul says. “You have to do it, or otherwise someone’s going to get hurt.”
Log in to use your Facebook account with
IllinoisTimes

Login With Facebook Account



Recent Activity on IllinoisTimes

Calendar

  • Mon
    20
  • Tue
    21
  • Wed
    22
  • Thu
    23
  • Fri
    24
  • Sat
    25
  • Sun
    26