The California Hospital Association has sued Blue Cross of California, seeking to block changes in the health plan's payment policy that the trade group says illegally interfere with a doctor's ability to make medical decisions based on the best interest of their patients.

The lawsuit, which was filed in Los Angeles County Superior Court on June 8, contends that Blue Cross is violating sections of the state's Insurance Code and the Knox-Keene Act, by providing doctors financial incentives to perform certain procedures in less expensive ambulatory centers, rather than a hospital-affiliated outpatient center.

Under the change, set to take effect July 1, physicians who perform colonoscopies in a hospital facility would find their usual reimbursement cut by 20 percent, the hospital trade group said. Conversely, if the same procedure is performed in a physician's office or a stand-alone ambulatory center, the health plan will add 5 percent to the usual reimbursement.

The suit argues that Blue Cross, a subsidiary of Indianapolis-based WellPoint Inc., is deceiving its members in order to boost corporate profits. "Our concern, first and foremost, is for patients," said CHA President C. Duane Dauner in a statement. "We want to make sure that every man, woman and child in California receives the best medical care possible not just the cheapest medical care."

WellPoint spokesman Robert Alaniz called the suit frivolous. "We believe this is a lawsuit that is based on dollars and not patient safety," said Alaniz, adding that there is no data that colonoscopies performed in a hospital are any more or less safe than in an ambulatory center, and that he himself has safely had the procedure done in a stand-alone center.

Keeping the down the cost of such common procedures helps Blue Cross to limit premium increases to its members, Alaniz said. Colonoscopies can be safely performed in outpatient centers for around $500, he said, compared to as much as $6,000 in a hospital setting.

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