Blue Cross Will Slash Specialists’ Fees in State’s Largest Managed Care Plan : Medicine: Payments to ‘primary care’ physicians. Moves are part of effort to cut costs.

Blue Cross of California, citing intense price competition in the state’s health care market, said it will slash payments by 6.8% to physicians in a health plan that serves more than 2 million Californians.

The cuts will primarily affect specialist physicians, such as surgeons, in Blue Cross’ Prudent Buyer Plan, the state’s largest preferred-provider organization. At the same time, Blue Cross is increasing payments to family doctors and other “primary care” physicians by an average of 2%.

Blue Cross’ move is part of a broader trend by managed care companies to trim costs by having more medical care provided by primary care doctors and discouraging the use of more expensive specialty procedures. The changes will affect nearly 40,000 Blue Cross physicians, having the most negative impact on radiologists, pathologists and other specialists.

Although Blue Cross has cut specialists’ fees for three years in a row, this year’s percentage reduction is the largest yet. Other managed care companies in California and elsewhere have also been trimming specialist payments.

“The fee adjustments reflect what consumers, from individuals to large corporations, are willing to pay for health care,” Dr. David Chernof, Blue Cross medical director, said Wednesday. The marketplace, he said, “is demanding that costs not only be controlled, but reduced.”

Blue Cross noted that average premiums for Prudent Buyer members decreased last year and that future declines are anticipated.

Some physician groups criticized the Blue Cross announcement, saying the decision to cut fees is not being driven by market forces but rather by Blue Cross’ desire to maximize profits at its for-profit subsidiary, WellPoint Health Networks, which runs the Prudent Buyer Plan.

“I would like to see these savings be translated into more services for consumers or lower premiums for employers, who pay most of the health care bill,” said Steven Thompson, vice president of government relations for the California Medical Assn. “But I’m afraid that we’ll just see this go to pay higher dividends to East Coast stockholders of WellPoint.”

Susan Hogeland, executive director of the California Academy of Family Physicians, also criticized the Blue Cross changes, even though many of the group’s members would benefit from increases.

Average income for family doctors lags so far behind that of specialists “that 2% doesn’t do too much for them,” she said. Also, Hogeland said, family doctors who also practice surgical specialties will see those rates slashed.