BCBS Lawsuit Accuses Rural Radiology Group of Monopoly
Missoula Radiology Inc, the only radiology practice in Missoula, Mont, is under fire from a recent antitrust lawsuit filed against it by Blue Cross Blue Shield (BCBS) of Montana, which claims that the practice has a monopoly on the area’s outpatient radiology services through its existing exclusive service contracts with Missoula’s only two hospitals. The suit also names Advanced Imaging, an outpatient radiology clinic that is a joint venture between Missoula Radiology Inc and the Community Medical Center in Missoula, as a defendant.
“It is not unusual for exclusive contracts between physician groups and hospitals to be challenged under the antitrust laws,” says Christine L. White, a partner at the law firm of McDermott Will & Emery LLP who focuses on health care antitrust issues. “However, most cases historically have been brought by physicians who were excluded from practicing at the hospital, not by payors.”
Along with BCBS of Montana, the plaintiffs include four local employers representing approximately 850 employees, and five individuals insured by Blue Cross. Among other accusations, the lawsuit, which was filed in federal court in Butte, claims that Missoula Radiology successfully implemented an anticompetitive strategy of securing exclusive contracts for radiology services with the only two hospitals and only outpatient radiology facilities in Missoula, and controlling the entry of radiologists by hiring/recruiting all radiologist entrants into the Missoula radiology market. The suit also claims that BCBS of Montana attempted to negotiate a resolution in which the defendants would participate in the provider network, but all efforts were rejected or ignored.
“The radiologists [of Missoula Radiology] will say that it is BCBS’s bullying tactics, but BCBS is on the same boat as the employers and individuals who are plaintiffs,” says Michael Bissegger, an attorney handling the case at the law firm of Epstein, Becker, & Green PC. “This is really a community problem, not just an issue of a big health plan fighting physicians.”
With the lawsuit, the plaintiffs seek to split Missoula Radiology into two separate physician groups and to force the radiology group to divest its investment in Advanced Imaging.
“We have a claim for damages, but more important, we want to fix the market by avoiding exclusive contracts, because it is serving as a barrier to entry,” says Bissegger.
According to a recent article in the Missoulian , tensions between Blue Cross Blue Shield of Montana and Missoula Radiology have existed since some radiologists left the Blue Cross network to join Missoula Radiology after a dispute about the rates paid by the insurance company. Since then, however, Blue Cross claims that the out-of-pocket rates paid by their members reached $1.3 million, a cost for service that members would not have to pay if the radiologists were in Blue Cross’ network, evidence of the lack of competition against Missoula Radiology, BCBS charges.
Missoula Radiology expressed disapproval of the lawsuit by saying the accusations are baseless. In a statement appearing in the Missoulian, Shannon Williams, the billing and office manager of Missoula Radiology, stated that the lawsuit was Blue Cross’ way of intimidating physicians to be part of their network. In the same article, Community’s president and CEO Tom Moser claimed that accusations of aggressively forcing hospitals to stop offering outpatient radiology services were false.
“Where an exclusive contract results from a competitive bidding process, and the hospitals holding the exclusive contracts are free to terminate, renegotiate, or rebid the contracts within a reasonable period of time, it may be difficult for a plaintiff to show any competitive impact resulting from the exclusivity,” says White.
Missoula Radiology and Advanced Imaging have 30 days to answer or file a motion to dismiss.
PET Coverage Alert
The Centers for Medicare and Medicaid Services (CMS) has expanded Medicare coverage of PET to include some Medicare beneficiaries with suspected Alzheimer’s disease and those at risk for Alzheimer’s who are enrolled in a large and easily accessible clinical trial.
According to the decision report, CMS determined that a fluorine 18-labled deoxyglucose (FDG) PET scan is necessary and reasonable for patients with documented decline of cognitive abilities for at least 6 months and a recent diagnosis of Alzheimer’s disease and frontotemporal dementia (FTD).
CMS specified conditions that it will use to determine if Medicare beneficiaries meet the requirements for Alzheimer’s and FTD coverage. Patients must complete a comprehensive clinical evaluation as defined by the American Academy of Neurology, including physical and mental status examination aided by cognitive scales or laboratory tests, neuropsychological testing, and structural imaging such as MRI or CT; patients must have been evaluated by a physician specialized in the diagnosis and assessment of dementia.
Other requirements include the necessity of the FDG-PET scan to be performed in facilities with proper accrediation, and that the scan must be read by an expert in radiology, nuclear medicine, or psychiatry with significant experience in finding presence of dementia.
Documentation of the following must be provided to CMS by the referring and billing providers of the Medicare patient: date of onset of symptoms; mini mental status examination, results of a MRI or CT test; number and name of prescribed medications; a report from any neuropsychological testing performed; diagnosis of clinical syndrome and presumptive cause; and relevant laboratory tests.
For this coverage rule, CMS will determine whether specific clinical trials meet these criteria.
Key Drivers of Escalating Hospital Costs
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In a study to see how prescription drug costs fared against other hospital costs for inpatient treatment, Solucient, Evanston, Ill, found that drug costs used for hospital inpatient care grew 22%, a slower growth rate compared to an average increase of 25% for the six other categories examined.
Average rates of cost increase for the other categories were diagnostic imaging, 36%; intensive and critical care units, 27%; laboratory, 18%; operating room, 32%; room and board, 16%; and supplies, 26%.
For the analysis, Solucient examined average costs per case by revenue centers, service lines, and groups of diagnoses, using its Projected Inpatient Database, and all-payor inpatient database for the health care industry that contains approximately 20 million discharges per year from close to 2,500 acute care hospitals nationwide.
People
 James Borgstede, MD. |
James Borgstede, MD, was appointed chair of the American College of Radiology (ACR) Board of Chancellors (BOC) at the ACR 81st Annual Meeting and Chapter Leadership Conference (AMCLC) in Washington DC on May 8-13, 2004. A fellow of the ACR, Borgstede has served as vice chair of the ACR Board of Chancellors since September 2002. He is a clinical professor of radiology at the University of Colorado Health Science Center, Denver, and a radiologist at Penrose-St Francis Healthcare System, Colorado Springs, Colo. He is also chair of the ACR’s Commission on Small and/or Rural Practices, and serves on the editorial board of the Journal of the American College of Radiology …Scott J. Filion joined Stentor Inc, Brisbane, Calif, as division vice president of sales reporting to Richard Dyke, vice president of sales…Darrin Uecker, chief technology officer at RITA Medical Systems Inc, Mountain View, Calif, will assume all operations responsibilities for the company’s vascular access products, research and development, clinical affairs, quality assurance, and all regulatory activities. Trent Reutiman was named vice president of sales and marketing…Randy Skiles, chief executive officer and founder of Shared PET imaging, Canton, Ohio, has been named Ernst & Young’s Entrepreneur of the Year in the Emerging Business category…The Food and Drug Administration (FDA) named Daniel G. Schultz, MD, as director of its Center for Devices & Radiological Health (CDRH). He will be responsible for the FDA’s review of all medical devices, equipment, instruments, and supplies, and will oversee the user fees issue and its review of medical device marketing applications. Schultz has served with the FDA since 1994.
Industry News
Cedara Software Corp, Toronto, announced that its common shares are once again trading on the NASDAQ National Market. The company subsequently announced that it has acquired all of the issued and outstanding shares of eMed Technologies Corp, Burlington, Mass…In a display of confidence in its 14 x 17 film, color paper, and grayscale paper Horizon imager, Codonics is offering a full five-year free warranty on its top Horizon models through March 31, 2005. “Horizon can pay for itself with the savings in service costs over five years,” notes Timothy J. Jablonski, Codonics VP marketing… Siemens Medical Solutions , Malvern, Pa, has received notice of the premarket approval application by the Food and Drug Administration (FDA) for the MAMMOMAT® NovationDR, a full-field mammography system based on amorphous selenium detector technology… Barco , Kortrijk, Belgium, received 510(k) approval for its Coronis 5MP Mammo display system. The company also purchased Voxar®, Edinburgh, Scotland, a 3D medical imaging software company, in a transaction valued at €39 million…The FDA has cleared GE Healthcare’s new EXCITE MR imaging platform for the GE Signa 1.5T and 3.0T MR systems. The enhanced version of EXCITE will allow for three new applications: VIBRANT, for bilateral breast imaging in a single examination; TRICKS, for contrast-enhanced angiography of the legs using a new 32-element peripheral vascular coil; and PROPELLER, for high-quality brain imaging that is highly resistant to motion artifacts…GE Healthcare Financial Services, Danbury, Conn, signed a global vendor financing agreement with Eastman Kodak Co’s Health Imaging Group (HI), enabling HI to offer its customers GE equipment financing options, including operating and capital leases, loans, and customized financing programs. HI now has a new, 2,500-square-meter headquarters facility, Kodak’s Technology … Innovation Center, in Pudong, Shanghai, China, to develop and showcase localized medical imaging and information solutions for Asia-Pacific customers…Merge Technologies Inc, Milwaukee, has authorized a stock repurchase plan for the purchase of up to $10 million of the company’s common stock; the plan allows purchases to be made over a period of 2 years, and the timing, price, and volume of repurchases will be based on market conditions, applicable securities, and other factors…DR Systems Inc, San Diego, has received clearance by the FDA to integrate diagnostic reading of digital mammography breast images in its RIS/PACS solution…As an active participant in National Mammography Day (October 15) and a member of the National Breast Cancer Awareness Month (NBCAM) Board of Sponsors, the American College of Radiology has created a promotion guide for the activities of NBCAM and is cosponsoring a national awareness campaign with the American Cancer Society entitled “What You Need to Know About Mammography”…Diagnostic Products Corp, Los Angeles, and Compugen Ltd, Tel Aviv, Israel, entered into a broad agreement where Diagnostic Products Corp will develop and commercialize new immunoassay and nucleicacid-based diagnostic products using Compugen’s developed biomarkers (and any new markers discovered through the collaboration); Compugen is entitled to receive development milestone payments and royalties on the sales of the diagnostic products… National Medical Development Inc , Bellevue, Wash, has formed a new affiliate company, Renaissance Medical Ventures LLC, a company specializing in the identification and acquisition of distressed assets in the outpatient market; Antony G. Clarke, former vice president of the entrepreneurial business group for Philips Medical Systems, Andover, Mass, will serve as president and chief executive officer of Renaissance.
