WHEN IS A DOCTOR NOT A DOCTOR?ACCORDING TO BLUE CROSS AND BLUE SHIELD, WHEN HE'S MAKING ADMINISTRATIVE DECISIONS SUCH AS REJECTING REQUESTS FOR SURGERY
After six months of nausea and pain, and a battery of tests, Sherrian Beagle was finally on her way to the hospital to have her gallbladder removed. Then she learned that her insurance company, Blue Cross and Blue Shield of Arizona, had decided she didn't need the surgery and wouldn't pay for it.
She ended up having the operation, anyway, and has felt fine since.
But it's a good thing she didn't wait for a determination of whether a Blue Cross administrator acted appropriately in rejecting her surgery. If she had, she'd still be waiting.
Beagle's gallbladder has become a sore point for doctors, insurance companies and state regulators arguing over who is accountable for determining medical treatments. The imbroglio is a byproduct of a managed-care delivery system, and, as managed-care programs become more common, stories such as Beagle's are likely to recur. So, too, will lawsuits like the one in this case, which has been in and out of court for two years.
The trouble started on December 28, 1992, when Beagle's physician, Dr. David Johnson, called Dr. John Murphy, then Blue Cross' medical director, for "precertification" to perform a gallbladder operation on Beagle. Precertification is insurer-ese for the permission health plans require doctors to obtain before costly procedures.
The next day, Johnson and Beagle were notified that Blue Cross had rejected the request. Murphy said Beagle's history did not justify surgery. An ultrasound analysis of her gallbladder showed no stones, there was no fever, and blood tests indicated that her immune system was functioning normally. Murphy opined that Beagle suffered from irritable colon syndrome, a malady not normally treated surgically.
Johnson disagreed with Murphy's conclusions, though he admitted that the surgery could not be classified as an "emergency" procedure. Murphy offered to have another physician examine Beagle, at Blue Cross' expense, and said that if a third doctor believed surgery was necessary, he would authorize it. Beagle declined. Despite Blue Cross' refusal to pay, she had the operation, anyway.
The surgery proved that Johnson's diagnosis had been correct.
Beagle filed a complaint against Murphy and Blue Cross with the Arizona Department of Insurance, stating that she had been denied benefits promised under her insurance contract. The department ruled that Blue Cross had done nothing wrong.
In January 1993, Johnson filed a complaint with the Arizona Board of Medical Examiners, accusing Murphy of "unprofessional conduct" and "medical incompetence." Court records show that BOMEX told Murphy to file a narrative of the events as he saw them, complete with supporting documents such as medical records and billing information. Murphy was told that under Arizona law, he would be guilty of "unprofessional conduct" if he failed to furnish the data within 20 days.
Murphy provided the information, but in an accompanying letter, wrote, "As Medical Director of Blue Cross and Blue Shield of Arizona, I am not involved in patient care and not involved in the practice of medicine. Therefore, I question whether the performance of my duties is subject to the review of the Board of Medical Examiners."
In October 1993, BOMEX invited Murphy to an "Informal Interview," and the board's staff was ordered to check the records of all procedures Murphy had denied. Murphy and Blue Cross insisted they did not need to give any records to BOMEX, because the board had no jurisdiction over Murphy's actions.
In February 1994, BOMEX subpoenaed some records from Blue Cross. The company protested, but finally complied in May. Blue Cross also wanted to meet with BOMEX to discuss whether the board indeed had the jurisdiction to be asking for any records. That meeting took place in early June, and it was decided that BOMEX would subpoena the records it wanted, but that Blue Cross would object.
The legal tussle wound up in Maricopa County Superior Court after BOMEX tried to issue Murphy a "Letter of Concern," the most benign action the board can take in cases of suspected misconduct.
Ultimately, the court agreed with BOMEX, ruling that Murphy was making de facto medical decisions and that his actions fell under the jurisdiction of BOMEX. But the court also ruled that BOMEX could not issue its Letter of Concern against Murphy, because it had made procedural errors.
Faced with a decision that included one win and one loss for each of them, both sides claimed a moral victory. But that doesn't mean that anyone is happy.
Mark Speicher, executive director of BOMEX, calls the decision a reaffirmation of the board's authority in such matters.
"I don't think there's any question that medical decisions like this one affect patient care," Speicher says. "And there's no question that we have jurisdiction over medical decisions."
Meanwhile, Murphy and Blue Cross appealed the decision on June 13, insisting that BOMEX has no jurisdiction over actions he claims are purely administrative. The company says it is already supervised by the state Department of Insurance, and subjecting administrative physicians to another layer of oversight can only hinder their efforts and hurt health care for everyone. BOMEX plans to cross-appeal for the right to give Murphy a Letter of Concern.
Whatever the beliefs of the parties to this case, the medical establishment's view of such situations seems clear. The American Medical Association has said in the past that it believes any physician making decisions which affect patient care--even "administrative" decisions--should be regulated by state medical boards. The AMA, however, also acknowledges that its word on the matter is far from final, and that the question is most often resolved in the courts. AMA officials lament that cases like this one are becoming common.
Another group keeping an eye on the trend is Public Citizen, Ralph Nader's watchdog organization. Philip Murphy, a Public Citizen spokesman, says that once Congress gets around to health-care reform, it must address the issue of managed-care administrators making medical decisions.
"What we always end up with is two doctors fighting about whether one procedure or another is appropriate," he says. "The conflict between the two doctors doesn't even have to be professional. There have been cases where it seems the two doctors simply didn't like each other. The patient ends up in the middle, and his ailment goes untreated.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss Phoenix New Times' biggest stories.