Multimillion-dollar verdict for doctor hailed as victory against insurer tactic

■ The California case is one of several recent lawsuits against health plans in which doctors allege poor business practices.

By Alicia Gallegos amednews staff — Posted May 27, 2013

California family physician Jeffrey B. Nordella, MD, said he hopes a jury award against insurer Anthem Blue Cross will encourage more physicians to fight unfair network denials and terminations.

In April, jurors awarded Dr. Nordella $3.8 million in compensatory damages after Anthem shut him out of its network. Dr. Nordella claimed that the insurer was retaliating against him because of his advocacy for patients who were denied Anthem coverage.

“I’m hoping that people will use [my case] as a call to action for other physicians that this has occurred to,” said Dr. Nordella, who practices family and emergency medicine in Northridge, Calif. When insurers “have so much power and authority, they disrupt the patient-physician relationship for financial gain. As in this case, they restricted their provider network for their own personal financial gain, which affects patient’s access, to health care by limiting its network. It’s wrong. The insurance company should not be in the middle of the relationship.”

Dr. Nordella sued Anthem in 2010 after his application to rejoin the network was rejected. He was terminated from the network in 2003. Anthem claimed that Dr. Nordella did not meet the criteria of its credentialing policy because he was not board certified at the time of his application. In addition, the insurer said there were more than 100 family physicians in a 10-mile radius of his practice.

But Dr. Nordella argued that Anthem was misstating its policy. At the time, the insurer had allowed doctors into its network if they were previously board certified and had practiced consecutively in that specialty for the last 10 years, he said. He claimed that Anthem was targeting him because he had repeatedly challenged its interpretation of “medically necessary” treatment and fought for patients who were denied payments.

At trial, attorneys for Dr. Nordella said Anthem violated a California law that requires insurers to have good cause for rejecting network inclusion. During testimony, Anthem could name only a small number of family physicians in the area, according to Dr. Nordella and attorneys familiar with the case.

Jurors ruled in Dr. Nordella’s favor, finding that Anthem had breached his right to a fair application procedure. After the $3.8 million verdict, Anthem and Dr. Nordella reached a settlement regarding punitive damages. Neither Dr. Nordella nor Anthem would discuss terms of the settlement.

In a statement, Anthem said it was disappointed with the verdict and is examining a possible appeal.

“In order to provide high level care for our members, Anthem generally requires board certification for all providers in our network,” said Anthem Blue Cross spokesman Darrel Ng. “Because Dr. Nordella did not have board certification in family medicine, the medical specialty for which he applied to be listed in the network directory, and Anthem had a sufficient number of general practitioners, he was not accepted into our network.”

The verdict is a significant victory for physicians nationwide who experience unfair treatment by insurers, said Rocky Delgadillo, CEO of the Los Angeles County Medical Assn. The Los Angeles County Medical Assn. supported Dr. Nordella and his position, Delgadillo said.

“Doctors at their core are patient advocates, and I think this case is about advocating for your patients even when that might put your career and your livelihood in peril,” he said. “Dr. Nordella’s actions in bringing this case and following it through to the end is an inspiration to other doctors throughout the state and the country to be fierce advocates for their patients, not just in the way they treat them with science, but in the way those patients are treated in the world of public policy.”

Moves by health plan questioned

Dr. Nordella’s case is one of many recent challenges filed by physicians against insurance companies.

In July 2012, the California Medical Assn. and more than 50 physicians sued Aetna for allegedly underpaying out-of-network physicians. CMA said the insurer is refusing to authorize some out-of-network services and illegally terminating the contracts of doctors who make such referrals. Also in 2012, the LA County Medical Assn. sued Health Net, claiming that the plan routinely denies payment for lifesaving health care services.

Several suits filed by insurers against doctors are ongoing, including four legal challenges by Aetna related to overbilling claims. The suits, filed in courts in California, New Jersey, New York and Texas, accuse doctors of drastically overbilling for out-of-network services.

In general, insurance companies are not often held accountable for unfairly denying or terminating physicians from their networks, said Andrew H. Selesnick, a partner at Los Angeles-based Michelman & Robinson LLP and chair of the firm’s health care law department. Frequently, insurers will use their power to “get rid” of physicians who appeal payment decisions or complain about the insurer’s practices, he said.

“For physicians, [Dr. Nordella’s case] is a terrific result, because these cases so rarely go to trial, and this case was a pretty substantial verdict,” he said. “It sends the message to health plans that you can’t retaliate against doctors and you can’t try to trim your rolls for your own economic benefit. You really need to have an excellent reason to exclude a physician from your network.”