Conn. AG Questions Physician Management Firm Over Medical Malpractice ‘Kickbacks’

June 13, 2005

An obstetrician and gynecologist management company has been subpoenaed as part of an investigation into whether it received insurance kickbacks that artificially inflated malpractice insurance rates for Connecticut doctors, state and company officials said.

Women’s Health Connecticut of Avon provides management services to more than 140 doctors and other health care providers around the state. It has been one of the most vocal supporters of a cap on awards in medical malpractice cases.

The company received a subpoena for insurance documents last week and planned to comply, said Nancy Bernstein, the company’s president.

Connecticut Attorney General Richard Blumenthal confirmed the subpoena was part of an investigation into whether the company profited from an illegal insurance brokerage deal that drove up premiums for unwitting doctors.

“The price of their insurance was raised as a result of this scheme,” Blumenthal said. “We’re talking about literally hundreds of doctors who see thousands of patients for ob-gyn services.”

Companies hire brokers to help them find the best insurance providers, who then pay the brokers a commission. It is illegal for brokers to pay clients or share commissions to secure their business — a practice called rebating.

The Women’s Health Connecticut investigation adds a new wrinkle to the typical rebating probe. The company’s former insurance broker, Hilb Rogal & Hobbs, acknowledged last month that its officials may have accepted extra fees, which are illegal, from insurance providers in exchange for steering business. Last month, HRH announced the resignation of its president, fired another employee and turned over documents to federal and state prosecutors and insurance regulators.

Blumenthal is investigating whether those illegal fees were shared with Women’s Health Connecticut managers without the knowledge of the doctors, who paid more for insurance because the hidden fees were wrapped into their premiums.

“We don’t believe that to be the case,” said Women’s Health Connecticut’s attorney, Katherine Keane. “If the investigation is raising those issues, we would certainly deny it.”

Keane said Women’s Health received payments from brokers and insurance providers for company services such as risk management and physician education but said those payments were not improper.

“These payments have not resulted in increasing the premiums of the participating physicians,” she said.

Blumenthal said the Women’s Health subpoena is one of several filed in a wider investigation of the industry.

Women’s Health Connecticut was formed in 1997 to provide billing and other managerial support for doctors who had been hiring their managerial staffs individually. The company says it is already the nation’s largest partnership between ob-gyn doctors and managers and plans to spread the model nationwide.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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