Chiropractors Contest BlueCross Decision

August 27, 2012 Updated Aug 27, 2012 at 7:11 AM EDT

By WKBW News
By Business First by Tracey Drury

August 27, 2012 Updated Aug 27, 2012 at 7:11 AM EDT

BUFFALO, NY (WKBW) - Chiropractors in the region are fighting a decision by BlueCross BlueShield of WNY to establish its own chiropractic network, a move that would shut out an existing independent practice association (IPA).

For the past 14 years, BlueCross BlueShield has contracted with Palladian Health, which manages the Palladian Chiropractic IPA. This week, BlueCross BlueShield announced it was bringing in house the management of its chiropractic network. The insurer touted the move as a way to improve services for patients; while participating chiropractors would see increased reimbursements and less paperwork and overhead costs.

Based in West Seneca, Palladian provides management programs and claims administration services to health insurers that outsource muscular-skeletal health care. It also provides services for physical therapy, spine care, wellness and employee assistance. Its relationship with BlueCross BlueShield began in 1998.

Mark Zygaj, executive vice president and COO, said the company was taken completely by surprise when it was notified with no explanation in February that BlueCross BlueShield intended not to continue the IPA contract after 2012. The two organizations have continued to negotiate on a resolution through mediation, with additional meetings scheduled in mid-September.

"We are in mediation with them and we believe there is an opportunity find common ground," he said.

Palladian's current proposal would give BlueCross BlueShield significant savings, Zygaj said, making its management of chiropractic services more profitable than in the past. The new model shifts both costs and financial risk from an outside vendor back to the health plan, Palladian says.

BlueCross BlueShield officials declined to discuss ongoing negotiations, saying it announced the new network this week for the benefit of members following a mailing last week to chiropractors. Implementing the change for Jan. 1 requires several months of internal changes that needed to begin now, said Dr. Rhagu Ram, BlueCross BlueShield vice president and chief medical officer.

"We made a business decision that directly managing and dealing with our chiropractic network was in our best interest and our members' best interest," he said.

Palladian's Chiropractic IPA also represents chiropractors with Univera Healthcare, while Independent Health manages the network internally. Statewide, the IPA represents 1,000 chiropractors, including about 250 in the Western New York region.

Losing the contract could also put about 45 jobs in jeopardy at Palladian, officials said. There's also the potential that chiropractors in the network who are unhappy with BlueCross BlueShield's planned internal network might resign from that network instead, which could disrupt care for members, Zygaj said.

Chiropractor leadership in the existing IPA say they're worried both about losing representation and their voice.

"That's our only union for doctors. It's our main voice," said Dr. Jeffrey Cianchetti, a chiropractor in Wheatfield and a vice chairman at the IPA. "It's really our only chance to effectively get into the system and make effective change."

Enticing chiropractors with a promise of less paperwork may seem like a short-term benefit, Cianchetti said, but the long-term result will be less data available to best track quality and outcomes. He also cited to the timing of the contract issue, pointing to legislative efforts underway at the State Legislature aimed at scaling health care co-pays to align with procedure costs.

Dr. Ali Jafari, a chiropractor in Cheektowaga and chairman of the IPA board, said the IPA gives chiropractors the ability to stick together and have a voice.

"We are that voice for the chiropractic profession and feel that Palladian has done a great job to maintain that," he said.

Several municipalities are getting involved, with the Town of Cheektowaga passing a resolution this week opposed to the proposed change in coverage, citing the likelihood that it would lead to a reduction in the number of chiropractors participating in the network and make it more difficult and costly for Cheektowaga employees to find services. Similar resolutions are under development in West Seneca, Lancaster and Depew, Jafari said.

"That tells you this is not a good thing that they're doing," he said.

BlueCross BlueShield says it will continue to work on developing advisory boards that include input from chiropractors. It also said area chiropractors in the existing network would automatically remain in its internal network Jan. 1 when the new plan year begins.

"We are very interested in getting input from the chiropractors who will be part of the network. They will be getting a very significant role in managing this program," Ram said.

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