Blue Cross, Gatekeeper Sued for Antitrust Violations

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Geographic Limits on Physical Therapists Reduce Competition and Force Patients to Pay More

Los Angeles, CA — Physical therapists brought a lawsuit last week to challenge an arrangement between California’s largest health insurer, Blue Cross, and Los Angeles-based Physical Therapy Providers Network (PTPN), under which the companies limit the number of “in network” physical therapists available to Blue Cross members in any one area. The geographic limitations reduce competition, in violation of state antitrust laws, and force Blue Cross patients to pay higher, “out of network” charges to obtain the physical therapy prescribed by their doctors, according to the lawsuit.

Under the arrangement, Blue Cross has designated PTPN its “exclusive” gatekeeper. Only physical therapists who are accepted by PTPN are authorized by Blue Cross as “in-network” providers. Their patients pay the lower, negotiated “in network” price for treatment. However, PTPN rejects 75% of the physical therapists who apply, according to an internal memo obtained by FTCR, on the grounds that the location is “full.”

PTPN requires those it accepts to pay it hefty fees for the coveted spots. Meanwhile, physical therapists have been forced to wait for up to twelve years to get on the approved list, during which they must pay PTPN fees just to remain on the waiting list.

At present, the PTPN/Blue Cross “geographic restriction rules” limit the number of therapists to as few as one per half-mile in urban areas.

“The Blue Cross arrangement with PTPN stifles competition among physical therapists, undermines quality health care and limits the choice available to Blue Cross members,” said Harvey Rosenfield of the non-profit Foundation for Taxpayer and Consumer Rights, co-counsel in the suit with the noted antitrust firm of Blecher & Collins.

The class action suit, brought under the state’s antitrust and consumer protection statutes, seeks an injunction forcing Blue Cross and PTPN to cease the anticompetitive conduct, remove the restrictions and permit all qualified physical therapists to become network providers. It was brought after extensive complaints were made to Blue Cross and PTPN about their practices. FTCR’s legal staff also brought the matter to the attention of the companies informally, to no avail. “Now these companies are going to be brought to justice in the courts,” said Rosenfield.

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Consumer Watchdog
Consumer Watchdog
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