Insurance Giant and Healthcare Providers Take Battle to Federal Court

Lilo H. Stainton | September 9, 2019 | Health Care
Horizon Blue Cross Blue Shield and American Specialty Health Group allege that various alternative healthcare providers have spread false and defamatory information against them

Credit: Twenty20
Chiropractor & physical therapy
A growing battle between New Jersey’s largest insurance company and certain medical professionals has landed in federal court, with Horizon Blue Cross Blue Shield and its potential claims-review partner insisting they have been the target of a smear campaign waged by various alternative healthcare providers.

Both Horizon and American Specialty Health Group (ASH), an Indiana-based company, filed civil lawsuits in U.S. District Court in Newark in late August alleging that select providers are disseminating false and defamatory information that could harm their reputations and revenue streams, as well as potentially destroy their would-be alliance. The two companies want a judge to force the providers to stop their public and member outreach, correct the record, and pay potential damages.

In June, Horizon announced it would contract with ASH to review claims for certain treatments — chiropractic services, acupuncture, physical therapy and, possibly, speech therapy — to try to reduce unnecessary care and potential overspending. According to Horizon, New Jerseyans use chiropractic services at more than double the national rate and are the country’s third highest consumers of PT.

Trying to control costs

“The status quo is not sustainable. In an effort to combat the above trends, responsible health insurers are seeking ways to control medical costs while still providing consumers with efficient access to medically necessary and appropriate treatment,” attorneys for ASH wrote in their Aug. 27 complaint. “Horizon is at the forefront of this battle to keep health care affordable while at the same time improving the quality of care and the customer experience.”

Horizon has insisted the arrangement — which would take effect in 2020 if state regulators approve it — would not change patients’ benefit plan or out-of-pocket costs, or create new requirements for pre-authorized insurance company approval in advance of any treatment. As envisioned, ASH would handle related claims for 2.6 million of Horizon’s 3.8 million members.

“Horizon and ASH seek to improve health care quality, affordability, and member experience by focusing on the delivery of better care. The program will reduce overall costs for health care, which makes health care more affordable and allows for lower premiums for consumers,” Horizon’s attorneys said in their suit.

But the June announcement triggered concerns for chiropractors and acupuncturists, among other providers, who claimed ASH has a history of improperly denying care and would reduce patient access to necessary treatment, while creating additional paperwork for everyone involved. ASH’s protocol is to have an in-house expert review a patient’s treatment plan after five sessions to determine if it aligns with best-practice guidelines before the company approves additional care; “medical necessity reviews” can also be conducted after additional treatment sessions.

Online efforts to block potential partnership

In August, the Association of New Jersey Chiropractors (ANJC) launched an online effort encouraging patients and providers to urge state officials to block the potential partnership; the New Jersey Doctor-Patient Alliance (NJDPA), a membership group that includes chiropractors, physical therapists and other providers, also rolled out a similar initiative.

Horizon’s suit is focused on NJDPA, while ASH is suing both groups.

Horizon’s potential partnership with ASH remains under review by the state Department of Banking and Insurance, which has two months to assess the arrangement. According to the chiropractors’ group, in the last six weeks, the agency has received hundreds of thousands of public emails, plus letters from a police union and several lawmakers — all raising questions about ASH’s potential role in claims review.

Horizon and ASH sent cease-and-desist letters to the provider groups in mid-August, but said they got no meaningful response; by the end of last month, they took the matter to federal court. In its filings, ASH noted it has already incurred “substantial ramp-up costs” in advance of any state approval.

Responding to claims targeting the Doctor-Patient Alliance, attorney Anthony LaRocco of K&L Gates said the alliance is prepared to prove the accuracy of its statements if the case proceeds to trial. In addition, a potential medical-necessity review after five sessions would have a notable impact on patients, he insisted, and the lawsuits are merely an attempt to stifle the group’s efforts to educate the public about these possible changes.

“Most subscribers have paid substantial premiums for plans with up to 30 chiropractic visits annually. If they are denied care for less than the 30 visits they contracted for with Horizon by ASH, they have lost these chiropractic benefits and have to assume the further financial burden for same,” he wrote.

“Thus, NJDPA’s and ANJC’s opinions as to the potential impact of the Horizon-ASH partnership on access to and quality of care are entirely accurate and fully supported by medical literature and actions in various states to pass legislation promoting conservative care before opioid use,” LaRocco continued. Their campaign has also stressed the importance of these alternative treatments in light of the state’s addiction epidemic.

Arguing lost chiropractic benefits

But in its lawsuit, Horizon claims this argument about lost benefits is unfounded, as the providers’ insurance plans remain unchanged. Such statements could “deter both potential members and providers from associating with Horizon,” the attorneys wrote, adding that “it is improper and misleading to conclude that Horizon’s relationship with ASH will produce harmful results.”

In ASH’s filing, company attorneys also underscored that “nothing in the Agreement changes Horizon’s obligations to its insureds in any way.”

In addition, ASH noted that it has worked with Cigna New Jersey for years, processing more than 12,000 claims for the company in 2018, of which less than 10 percent required a medical review. In many cases, the review can be completed in 24 hours and the patient may never need to get involved, it said.

However, a DOBI review of the company’s work with Cigna between 2010 and 2012 found errors in nearly a quarter of the claims and more than $10,000 in denied benefits. And last week, a Philadelphia federal judge signed off on an unrelated $11.7 million settlement between Cigna and ASH and a class of providers, including a New Jersey chiropractor; ASH notes it did not admit wrongdoing and was not required to change its practices in the agreement.

In the Garden State litigation, ASH also defended its role to battle addiction and questioned the real motivation of those involved in the public campaigns to nix its deal with Horizon, suggesting they are more worried about the possible impact on their bottom line.

“In truth, ASH prides itself in offering solutions to the opioid epidemic and has played an important role in many health care leadership, legislative and health care policy initiatives to promote the need for access to conservative care,” the lawyers wrote.

“Although these providers couch their concerns as being about their patients’ well-being, their true concern is financial.”