State Leadership Conference

Just before Thanksgiving day in 1997, Elizabeth Hauck, PhD, was among the many Virginia psychologists who received a letter from an HMO notifying them that the company was going to pay 30 to 45 percent less for their services.

"The letter implied that if you objected to this fee schedule, you had to drop out of the panel within one month, which was contrary to the language in the provider agreement," Hauck explained during a session at the APA Practice Organization's State Leadership Conference.

Three and a half years later, Hauck, who is the outgoing president of the Virginia Academy of Clinical Psychologists (VACP), and other plaintiffs are awaiting their day in court against Blue Cross Blue Shield of the National Capital Area (after the suit was filed, Blue Cross became Capital Care) and related corporations. Their lawsuit is part of APA's test-case agenda, which supports state and provincial psychological associations who are challenging inappropriate managed-care practices.

The plaintiffs--VACP, six psychologists, a patient and a consumer who selected the plan--allege that the rate cut and other practices were unfair to psychologists and consumers, and that Blue Cross marketed a plan supported by a large, stable provider panel, knowing that the imminent rate cut would cause many providers to leave the panel.

Their case has cleared many hurdles already, including a motion to dismiss it, in which the U.S. Department of Labor filed an amicus brief supporting the plaintiffs' position. In addition, the court ruled in favor of the plaintiffs' motion to force Blue Cross to provide applicable documents and pay the plaintiffs' costs for bringing the motion. Last year, VACP's legal team was able to fully review those documents and conduct 50 days of depositions.

At press time, the plaintiffs were waiting for the court to rule on the defendants' motion for summary judgement, which seeks to block the plaintiffs' claims from going to trial. Pending the court's ruling, a trial is anticipated during the second half of 2001.

Because taking a case to trial is both time-consuming and expensive, APA's Office of Legal and Regulatory Affairs does not intend to take on any new test cases until the Virginia lawsuit is completed. However, APA is keeping its eyes open to identify and lay groundwork for the next case, said Alan C. Nessman, JD, APA's legal and regulatory affairs special counsel.

Other presenters at the leadership conference session included moderator Shirley Higuchi, JD, the APA Practice Organization's assistant executive director for legal and regulatory affairs, and Sally Singer Horwatt, PhD, past-president of the Virginia Psychological Association and one of the test case's plaintiffs.