An independent physicians association representing almost 200 doctors who serve San Francisco’s Chinese Hospital and Chinatown health clinics today announced it has filed a lawsuit against the Chinese Community Health Plan claiming that its management conducted fraudulent business practices to gain economic advantage.
The physicians association, the Chinese Community Health Care Association, is a non-profit medical group that for decades has worked with the Chinese Hospital and Chinese Community Health Plan with the common goal of bringing low-cost health care to San Francisco’s Chinese community.
In 1982, Chinese Hospital created Chinese Community Health Plan as a means of offering affordable health insurance to its patient population.
Dr. Mai-Sie Chan, a community internist and secretary of the physicians association, said today that in early July it surfaced that the health plan was trying to form direct contracts with some of the physicians who are represented by the association.
Various independent physicians started to approach the association when they received a solicitation from the health plan to “renew” a contract that had never previously existed, Chan said.
The association states that physicians were misled by the health plan into believing they needed to simply renew an existing agreement, but were actually given a completely new offer that would have legally bound the physicians directly to the health plan.
Physicians who agree to enter a direct contract with the health plan would no longer be independent.
Chan, who shares a medical practice with her father, said that by bypassing the association, instead of through it, the health plan would have more control over doctors and the care they give to their patients.
She said the health plan used “misleading and fraudulent” language in the materials they sent to the physicians along with the contracts.
The lawsuit alleges that Chinese Community Health Plan was carrying out a “calculated and well-planned scheme” to eventually put the association out of business.
Chan said that she is concerned that without the association “physicians would have less of a united voice” and potentially be unable to provide the same high quality care to their patients.
Two physicians in the association, who work at the Chinese Hospital, have already signed direct contracts with the health plan, Chan said.
The physicians association has not only filed a lawsuit in San Francisco Superior Court against the health plan claiming a breach of contract and fraudulent business practices, but also issued a formal complaint about the health plan to state regulators, according to a statement released by Chinese Community Health Plan.
The health plan believes the claims listed in the litigation are without merit.
Brenda Yee, chief executive officer of both the nonprofit Chinese Hospital and the for-profit Chinese Community Health Plan, downplayed the allegations made by the association in a statement released today, saying that doctors, not the association have the right to contract with whichever medical group or health plan they choose.
Chinese Community Health Plan maintains that it sent certain qualified providers the contracts in order to comply with regulatory requirements imposed upon it by Covered California, Medicare Advantage and accreditation programs.
Dr. Raymond Li, the president of the physicians association, however, said the health plan’s move threatens the health care of San Francisco’s entire Chinese community.
Li said the health plans’ action “threatens to dismantle the health system we have fought to create” and aims to drive up profits at the patients’ expense.
John Williams, the chief executive officer of the independent physicians association said that what the health plan did is a step toward corporate medicine.
“We’re fighting for community medicine, community health care,” Williams said, explaining that independent physicians can make autonomous choices regarding the length of time they spend with their patients, how much they charge patients, and how they decide to provide medical care.
The lawsuit comes less than a year before Chinese Hospital and Chinese Community Health Plan plans to move into a new, $160 million Chinatown facility.
The expanded hospital aims to accommodate an increased number of patients who are expected to enter the health care system as a result of the Affordable Care Act and Covered California.
The California Medical Association and the San Francisco Medical Society penned a joint letter to Yee on August 5 expressing their concerns about the health plan’s alleged efforts to pressure the association’s physicians to abandon the negotiated managed care agreements secured by the association for its physicians.
“CMA and the SFMS are prepared to support CCHCA and its physicians to continue to achieve its charitable purposes,” the letter states.
The physicians association maintains that the health plan’s recent actions “to siphon doctors from the association threaten to tear apart longstanding health-care alliances in the community while putting the very future of the hospital at risk.”
Hannah Albarazi, Bay City News
