Saying "HMOs will not oppose a directive from this office," Georgia Insurance Commissioner John W. Oxendine is set to order the state's HMOs to disclose their formulas for paying doctors. The move comes on the heels of a Georgia trial court's ruling that Blue Cross and Blue Shield of Georgia (BCBSGA) — the state's largest health insurer — must reveal its payment schedule and its method for calculating those payments to doctors who participate in its plans.

Oxendine, who is well-known for his tough stance against HMOs for violating the states's prompt-pay law, says Georgia HMOs know that he willl not hesitate to issue "very heavy fines" if they ignore his order to reveal their secret payment practices. " [Fines] get their attention," he says.

The American Medical Association is heralding the Georgia court's decision as a major victory for physicians nationwide who are up in arms over HMO industry practices known as "downcoding," meaning changing billing codes to indicate a doctor should be paid less, and "bundling," meaning issuing a single lower payment for a group of related medical services rather than paying for each service individually. Five state medical societies (Connecticut, New Jersey, New York, South Carolina, and Tennessee) have filed lawsuits against the nation's top HMOs alleging deceptive business practices like these.

Will HMOs 'fess up?

The Georgia court decision, handed down on April 29, 2002, arises from a 1997 breach of contract lawsuit filed by the Medical Association of Georgia and four of its physicians against BCBSGA. The court has give BCBSGA a deadline of May 29, 2002, to publish its payment information. According to the state's medical association, BCBSGA must disclose enough information so that doctors can calculate whether they've been paid in full and how that amount was determined.

BCBSGA spokesperson Charlie Harman says legal counsel is reviewing the court's decision and "we are considering alternatives we may pursue."

Calls to Aetna U.S Healthcare, UnitedHealthcare and Humana seeking comment on whether they will oppose Oxendine's directive were not returned.