Chiropractic Groups File Suit
Against Managed Care Company

The American Chiropractic Association (ACA), the Virginia Chiropractic Association (VCA), five doctors of chiropractic and 18 chiropractic patients have filed suit in U.S. District Court against Virginia's largest managed-care company, Trigon Blue Cross Blue Shield and the national Blue Cross Blue Shield (BCBS) Association, raising allegations of racketeering, extortion, mail fraud and anti-trust violations and other state and federal law violations. The suit also seeks to invalidate the BCBS trademark because of these illegal activities.

The suit claims that chiropractic patients in Virginia and across the country have been denied much-needed chiropractic care by the managed-care company. This lawsuit is by far the most significant and aggressive legal action ever taken by the chiropractic profession against the insurance industry. The lawsuit asserts that insurance companies need to adhere to accepted legal standards.

The impact of this lawsuit on the managed care industry could be far-reaching, with national significance beyond just Trigon and the BCBS Association, according to ACA officials. Many BCBS plans and other insurers have adopted policies that single out doctors of chiropractic for discriminatory treatment. The ACA/VCA lawsuit directly draws into question the legality of this type of treatment, drawing upon federal anti-trust, trademark and RICO statutes, as well as state statutes and common law. ACA officials said the suit is also part of an effort to change the way many managed-care plans nationwide have apparently ignored accepted legal standards.

What follows is a detailed description provided by ACA of the eight counts of the lawsuit, and a practical explanation for what each of these counts could mean to the chiropractic profession:

Count I - Trademark and Anti-Trust Violations Against Trigon Companies, the Blue Cross Blue Shield Association and Medical Doctors: This count alleges that Trigon and its medical doctor co-conspirators -- the BCBS Association and MD advisors -- have launched an illegal boycott against doctors of chiropractic and have tried to force them out of the marketplace by refusing to pay for recognized services or by providing unreasonable and unconscionably low reimbursement. This count also asks for the revocation of the BCBS trademark and anti-trust remedies.

The suit asserts that, specifically, Trigon and BCBS have:

• imposed a $500 cap on spinal manipulation that principally penalizes patients of doctors of chiropractic;

• reimbursed doctors of chiropractic 40% less than medical doctors for the same services;

• paid doctors of chiropractic for the lowest level manipulation treatment code possible, despite the fact that a higher level manipulative treatment has been performed;

• refused to reimburse for the services of chiropractic assistants.

The suit claims that Trigon, the BCBS Association and medical doctors have tried to exclude doctors of chiropractic from the managed-care network by refusing to pay for recognized services, or by aying exceptionally low -- or no -- reimbursement.

According to the suit, these acts restrain trade by keeping patients away from doctors of chiropractic. Trigon has steered potential patients away from chiropractic care by denigrating chiropractic treatment and by unreasonably limiting the coverage of chiropractic treatment under health-care plans that it administers.

This count, as well as Count II, contains a unique and aggressive approach against the national BCBS Association. In addition to an anti-trust remedy, it seeks to invalidate the BCBS trademark, because the suit claims that the national BCBS Association has essentially condoned Trigon's treatment of doctors of chiropractic, knowingly allowing them to discriminate against the chiropractic profession under the auspices of the BCBS logo.

Count II - Hurting Patients by Monopolozing the Marketplace for Treatment of Neuromusculoskeletal Conditions: This count alleges that Trigon, the BCBS Association and medical doctors have interfered with the rights of patients by forcing them, through restrictive policies, to see medical doctors rather than doctors of chiropractic.

·Not only have Trigon, the BCBS Association and medical doctors conspired to boycott and refused to deal with the chiropractic profession, but they have also attempted to monopolize the market for treatment of neuromusculoskeletal conditions by pushing doctors of chiropractic out, and then taking over the market for themselves, according to the lawsuit.

Count III - Violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act through Coercion, Extortion and Mail, Wire and Securities Fraud: This count alleges that because Trigon is such a dominant force in the health-care marketplace in Virginia, it is able to exploit fear in doctors of chiropractic by forcing them to make a "Hobson's Choice" -- either accept the predatory and punitively low reimbursement rates Trigon allows, or face exclusion from the Trigon network, the largest managed-care plan in the state of Virginia. Additionally, this count alleges that Trigon had a "scheme to defraud," for knowingly misrepresenting its reimbursement policies to the Securities and Exchange Commission.

By charging violations of the RICO Act, this count duplicates the use of the RICO Act against a hospital, a professional condominium association and numerous medical physicians that allegedly discriminated against a neurosurgeon for practicing with a chiropractor.

The lawsuit alleges that Trigon has knowingly sent this false information regarding their reimbursement rates through the U.S. mail and in documents transmitted by wire in interstate commerce, including documents filed with the Securities and Exchange Commission.

Count IV - Illegal Interference with Business Expectancy: This count alleges that Trigon improperly interfered with the reasonable and contractual business expectation that a doctor of chiropractic has with a patient under Trigon business plans. In other words, doctors of chiropractic have a reasonable expectation that they will receive reasonable compensation for their services, and chiropractic patients have a reasonable expectation that Trigon will not interfere with their relationship with their doctor of chiropractic.

Count V - Violating State Law by Willfully and Maliciously Harming a Trade Business Reputation: According to Virginia law, it is illegal to intentionally harm a person's trade business reputation and profession - and the suit alleges that Trigon, the BCBS national association and medical doctors conspired to do that against doctors of chiropractic. This type of state statute is common to most states.

Count VI - Breach of Contract with Doctors of Chiropractic: There is an implied notion under Virginia law that compensation under a contract be reasonable. The suit asserts that Trigon's enforcement of its contract with doctors of chiropractic is completely unreasonable.

Count VII - Common Law Conspiracy to Injure the Practices of Doctors of Chiropractic: Similar to Count V, this count uses notions of common law, rather than state statute, to charge Trigon, the BCBS Association and medical doctors with intentionally injuring the practices of doctors of chiropractic.

Count VIII - Violation of the Insurance Equality Laws of the Commonwealth of Virginia: Because Trigon is paying doctors of chiropractic 4% less than it is paying medical doctors for the exact same services and is imposing a cap on chiropractic services, it is violating state insurance equality laws, the suit alleges.

The plaintiffs say they are seeking a restraining order against Trigon companies and the BCBS Association, three times the amount of the actual damages doctors of chiropractic have suffered, plaintiffs' costs and attorneys' fees, the revocation of the BCBS trademark and punitive damages against Trigon

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