Kansas Jury Awards Six Doctors $6M in Lawsuit Accusing Blue Cross and Blue Shield of Kansas City of Underpayment for Medicaid Services
Blue Cross and Blue Shield of Kansas City must pay six physicians more than $6 million in compensatory and punitive damages following a jury verdict that the insurer had "systematically underpaid" the physicians for years, the Kansas City Star reports. The physicians provided indigent care and participated for 13 years in the PreventionPlus program, in which they offered preventive care to children of Medicaid enrollees for a capitated fee per patient. The doctors' lawsuit alleged that the insurer kept its capitation rates "artificially low" and charged "excessive" administrative fees, resulting in a collective underpayment of $2.54 million. The doctors maintained that instead of reimbursing them, Blue Cross withheld information to conceal the profits it was on the program. The physicians said the profits were used instead to give pay raises to top executives, to subsidize a new product and to increase the company's bottom line as it prepared to go public. The jury awarded the physicians $3 million in compensatory damages, with each physician receiving separate awards ranging from $120,000 to $960,000, and $3.09 million in punitive damages. Blue Cross officials declined to comment after the verdict but argued during the trial that they had complied with agreements stating that capitated payments would be determined annually based on inflation, the needs of the physicians and actuarial success of the program (Margolies, Kansas City Star, 6/5).
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