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97-2288 CIVIL TERM
determined by one of two Review Committees." Article X, Sec. 1 (1995).
PSS' Regulations for Patient Providers further explain how these
controversies shall be decided. The regulations state that "all matters, disputes or
controversies relating to the services performed by Participating Provlders...shall
be considered, acted upon, disposed of and determined only by providers In a
manner provided by Article X of the By-Laws of Blue Shield. Regulations for
Participating Providers, General Regulations B(20). The Review Committee
Guidelines go on to say that "matters referred to the Review Committee generally
concern disputes with respect to overutillzation and/or misutillzation of services,
quality of care, service benefits and usual charge problems." PBS Review
Committee Guidelines, Appendix B.
In an opinion somewhat similar to the one at bar, this Court was asked to
determine whether a claim brought against PBS for interpretation of a providing
participant agreement between a health services provider and PBS was required
to initially go through an alternative dispute resolution process. The Court held that
40 Pa. C.S.A. Section 6324 of the Professional Health Services Plan Corporation
Act agives PBS power to elect an administrative panel to hear and resolve disputes
concerning the professional health services rendered by its participating
physicians." RRS Imaging Assoc v. Medical Service Assn., 42 D & C 3d 42, 43
3
97-2288 CIVIL TERM
(1985).
Additionally, the Pennsylvania Supreme Court has already recognized that
various statutes now encourage arbitration and alternative dispute resolution Is
favored by the courts. Borough of Ambridge Water Authoritv v. Columblf;!, 458 Pa.
549, 328 A.2d 498, 500 (1974).
Based upon the above requirements, this Court finds that the Plaintiff Is
required under his agreement with PBS to first submit his complaint to altemative
dispute resolution rather than initially filing it with the court system. The
Pennsylvania Health Services Plan Corporation Act clearly states that PBS has the
right to prescribe the manner used to settle disputes and controversies. PBS, in
Its by-laws, has determined that all matters arising out of the relationship between
participating providers and PBS shall be disposed of via one of two Review
Committees. Based upon this reading, any dispute which falls under this
requirement must be determined by the Review Committee before it can be
removed to the court system.
The case at bar meets the requirement of a matter which arises out of the
relationship between a participating provider and PBS. Wenrich is a participating
provider who is required under the PBS agreement to forward certain information
to the Defendant in order for PBS to determine the quality of Wenrich's equipment.
4
97-2288 CIVIL TERM
In turn, Wenrich can submit his bills to PBS which then pays or denies the claim
and sends notices to the participating patients whom Wenrich has treated, Were
Wenrich not a participating provider for PBS, Defendant would not have had any
reason to send the supposedly defamatory letters to any of Wenrich's patients.
Therefore, this case arose from the relationship between Wenrich and PBS.
Furthermore, the PBS guidelines go on to say that the matters referred to
by the Review Committee generally concem disputes with respect to overutillzatlon,
quality of care, service benefits and usual charge problems. Plaintiff alleges that
his claim does not fall within the list of disputes. Plaintiff fails to see that this list
Is just a generality produced by PBS to show what disputes are commonly dealt
with by the Review Committee. However, there is no limitation placed upon this
list, nor does PBS specifically list any disputes which are not covered under the
Review Committee's jurisdiction.
Plaintiff characterizes his claim as one of defamation in a possible attempt
to avoid alternative dispute resolution. This Court finds that the dispute between
Plaintiff and Defendant is actually one based upon the requirements of Plaintiff as
a PBS provider. Although Plaintiff couches his complaint in terms of defamation,
this Court will not allow mere linguistics to prevent this case from going to
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PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and subnitted in duplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please list the within matter far the next Argunent Court.
---------------------------------------------------------------------------------------
CAPTION OF CASE
(entire caption must be stated in full)
Leslie Wenrich, D.C.,
(Plaintiff)
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Highmark, Inc., d/b/a/
Pennsylvania Blue Shield,
(Defendant)
No. 2288
Civil
19 97
1. State matter to be argued (i.e.. plaintiff's IIDtion for new trial. defendant's
dem.u:rer to c~1aint. etc.): Defendant's Preliminary Obj ections.
2. Identify counsel who will argue case:
(a) for plaintiff: Spero T. Lappas, Esquire
~s: 205 state street
Harrisburg, PA 17108
(b) for defendant:
Address:
Bridget E. Montgomery, Esquire
One South Market Square Building
213 Market Street
Harrisburg, PA 17101
3. I will notify all parties in writing within t:IoIO days that this case has
been listed for argurent.
4. Argunent Court Date:
Dated:
Attorney for Plaintiff
averments are denied.
7. Paragraph 7 consists of arguments and interpretations to
which no answer is necessary. To the extent that an answer is
necessary, those averments are denied.
8, Denied. Plaintiff denies that he is required to submit
"all" controversies to the PBS Medical Review Committee. Plaintiff
denies that he is or was required to submit the present controversy
to the PBS Medical Review Committee.
9. - 18. Paragraphs 9 through 18 are legal argument or
citations or quotations to other documents or laws. No answer is
necessary or required to these paragraphs. To the extent that an
answer is necessary the averments of those paragraphs are denied.
19. Plaintiff admits that there were communications between
Plaintiff and Defendant. Plaintiff denies that any of those
communications constitute a defense to the present case.
20. Denied. Plaintiff denies that he ever refused to comply
with his contractual obligations to cooperate with Defendant or any
of Defendant's agencies or committees in any way whatsoever.
21. Paragraph 21 refers to a letter dated May 9, 1996, which
letter speaks for itself. To the extent that Defendant may have
quoted or interpreted this letter incorrectly, the averments of
paragraph 21 are denied.
22. Paragraph 22 misstates the Defendant's actions in this
case. Rather than send the Plaintiff's patients a notice "of the
reasons for its refusal to make payment for x-rays performed in
The Law Offices of Spero T. Lappas
Page 2
Plaintiff's offices" the Defendant sent the Plaintiff's patients a
false and defamatory notice which falsely and fraudulently set
forth the allegation that the Defendant had made a determination
concerning Plaintiff's office equipment when, in prior
correspondence to the Plaintiff, and in subsequent correspondence
the Defendant acknowledged that there had been no determination
made. Accordingly, all averments of paragraph 22 are denied.
23, Denied. This dispute does not concern Plaintiff's
failure to satisfy his contractual obligations to cooperate with
PBS. This dispute furthermore does not concern the decision by PBS
to exercise its contractual right to deny payment for such services
based upon concerns that the equipment failed to satisfy the
standards of practice. This dispute certainly does not fall within
the sole jurisdiction of the medical review committee. All
averments in paragraph 23 are denied.
24. plaintiff denies that he had any obligation to take or
submit this matter in writing to the medical review committee.
Plaintiff denies that his actions are in any way a violation of the
contractually agreed upon alternative dispute resolution
provisions. Plaintiff further denies that his actions are in
violation of any law, contract, regulations or other requirements.
25. Denied. Plaintiff denies that the Complaint fails to
state a claim upon which relief can be granted.
26. Denied. Plaintiff denies that Defendant's actions is
absolutely privileged for any reason whatsoever.
The Law Offices of spero T. Lappas
Page 3
The Law Offices of SPERO T. LAPPAS
205 State Street
Post Office Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
By: SPERO T. LAPPAS, Esquire
Pa. Supreme Court identification no. 25745
ATTORNEY FOR THE PLAINTIFF
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D. C. CIVIL ACTION - LAW
Plaintiff : NO. .2J.:- J}- 't'g- ~l.
:
v.
:
PENNSYLVANIA : JURY TRIAL DEMANDED
BLUE SHIELD, :
Defendant :
NOTICE TO DEFEND AND CLAIM RIGHTS
YOU HAVE BEEN SUED IN COURT. If you wish to defend against
the claims set forth in the following pages, you must take action
within twenty (20) days after this Complaint and Notice are served,
by entering a written appearance personally or by attorney and
filing in writing with the court your defenses or objections tot he
claims set forth against you. You are warned that if you fail to
do so, the case may proceed without you and a judgement may be
entered against you by the court without further notice for any
money claimed in the Complaint or for any other claim or relief
requested by the Plaintiff. You may lose money or property or
other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
COURT ADMINISTRATOR
CUMBERLAND COUNTY COURTHOUSE
1 COURTOUSE SQUARE
CARLISLE, PA 17013
(717) 240-6200
The Law Offices of SPERO T. LAPPAS
page 1
3. PBS is in the business of providing health and medical
insurance benefits to customer subscribers. Pursuant to this
business, PBS receives and pays qualifying medical and doctor bills
for its subscribers.
4. At all times material to this cause of action and for all
acts, conduct and omissions described in this Complaint or
otherwise material and relevant to the cause of action stated
herein, the Defendant acted through agents and servants (some of
whom are named in this Complaint and some of which are not named in
this Complaint) for whose acts, conduct and omissions the Defendant
is responsible and liable.
5. All such agents and servants of the Defendant acted within
the course and scope of their employment with respect to all acts,
conduct and omissions described or referred to in this Complaint or
otherwise relevant to this cause of action.
6. At various and diverse dates within the statute of
limitations, Dr. Wenrich sent bills to PBS for payment in
accordance with the PBS subscriber agreements which covered certain
of Dr. Wenrich's patients.
7. After Dr. Wenrich submitted these bills, PBS sent notices
by mail to several of the covered patients telling them that the
bills were disapproved for payment.
8. As part of the message by which these patients were
notified that their bills were disapproved for payment, PBS told
the patients that Pennsylvania Blue Shield had "determined" that
The Law Offices of SPERO T. LAPPAS
Page 4
Dr. Wenrich's equipment was substandard. This "determination" was
cited as the reason, or one of the reasons, that the bill was being
disapproved for payment. A specimen notice is attached hereto as
Exhibit 1.
9. In fact, PBS had made no such determination at all. In a
letter dated May 9, 1996 and signed by Emelie Sconing, PBS admits
that it was simply assuming that Dr. Wenrich's equipment did not
meet the appropriate standards. A true copy of this letter is
attached hereto as Exhibit 2.
10. There was never any "determination" as Pennsylvania Blue
Shield falsely reported to the Plaintiff's patients.
11. The assumption of PBS that Dr. Wenrich's equipment was
substandard was based upon PBS' S feeling that Dr. Wenrich had
allegedly failed to reply timely to PBS' s requests for certain
information about Dr. Wenrich's office equipment.
12. In fact, PBS had never made any determination that Dr.
Wenrich's equipment was substandard.
13. In fact, Dr. Wenrich's equipment was not substandard.
14. To the best of the Plaintiff's information as of the
filing of this complaint at least six patients, and maybe more,
received these false and defamatory communications from the
defendant. The Defendant has supplied a list of patients who
received the offending Notice. This list is attached hereto as
Exhibit 3.
15. All of the defendant's statements of or about the
The Law Offices of SPERO T. LAPPAS
Page 5
Plaintiff as described above are and were false and defamatory to
the Plaintiff. They tend to blacken the Plaintiff's reputation or
expose him to public hatred, contempt, or ridicule, or to injure
him in her business or profession.
16. All of these statements and remarks expressed and
communicated their defamatory meaning about the plaintiff either
directly and overtly or by reasonable implication, insinuation, and
innuendo.
17. Each of the above-described statements and remarks when
heard or read in its totality and context is and was defamatory of
the Plaintiff.
18. Furthermore, each statement and remark is and was
defamatory inter alia in that the defendants thereby described the
Plaintiff as doctor who uses or has used substandard equipment to
treat his patients or to make diagnoses.
19. All of these statements and remarks and the defamatory
content thereof applied to the Plaintiff either overtly or by
reasonable implication.
20. All of these statements and remarks were published to
persons who understood them to refer to the plaintiff, and who
understood them as intended to be applied to the Plaintiff.
12. The defamatory content of these statements is false and
untrue.
21. The Defendant in connection with the making and
publishing of these statements and remarks were reckless, or in the
The Law Offices of SPERO T. LAPPAS
page 6
alternative, they were negligent.
22. None of these publications, statements or remarks was
privileged; in the alternative, any privilege which would have
otherwise attached to the Defendants and their publication of these
statements and remarks did not attach by virtue of actual malice
and/or abuse, recklessness, reckless disregard of the falsity of
the publication, or negligence, or otherwise.
23. As the direct, legal, and proximate result of the
Defendant's actions as described in this Complaint, the Plaintiff
has suffered actual harm in that, inter alia,
a. he has suffered the impairment of reputation and
standing in the community;
he has been libeled, slandered, and defamed in
connection with his competence to carry on his
business or profession;
he has suffered great
humiliation, mortification,
anguish and suffering;
he has been exposed to public contempt and
b.
c.
and extreme personal
embarrassment, mental
d.
ridicule;
e. he has been injured in her business or profession.
The Law Offices of SPERO T. LAPPAS
page 7
-tXPLANATION OF BENEFITS
KEEP FOR YOUR TAX RECORDS
Oh.. ,~.II.r04 8lw Croll rill" of r'/lIIt'f+..."I. .r. lI...,./W.lIt
lll'~'" ., 1M Oh.. C,o" .104 nll,/. ''''1'1. A......lolI
PENNSYLVANIA BLUE S/fIELD
CUSTDMER SERVICE
PO BOX 890056
CAMP /fILL PA 17089-0036
Subscriber. DENNIS l SCIlNECK
Patient. CIlARlOTTE B SCIlNECK
Previderl LESLIE W WENRICIl DC
(000115611 )
10 Numberl t68323241
Claim Number. 56255012612
Page. I ef I
Date. 09/12/96
PROCEDURE DESCRIPTION
PROCEDURE CODE SERVICE PROVIDER'S ALLDWANCE AI10UNT PAID AMOUNT REMARKS
lHU/fBER OF SERVICESl DATE IS) C/fARGE NOT PAID
SPINAL XRAY 10011 07/0B196 ~5,OO .00 .00 Q5.00 051Q5
72050
SPINAL XftAY 10011 07/0B190 75.00 .00 .00 75.00 051~5
0
0 S o 00 00
D5145
Pennsylvania Blue Shield has determined that the equipment used to pre vide this
diagnostic test does net meet the accepted standard ef quality in the community.
Therefore, no payment will be made. A participating previder may net bill the
patient fer this service.
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1...111...11.1...11....11.1.1..,...1..11...1.1.11..1..1.1.'..1
DENNIS L SCIlNECK
RD I BOX 368
PINE GROVE PA 17963-9732
" ,
.-.;-.-
THIS IS NOT A BILL
IlAVE A QUESTION? PLEASE CALL (717) 731-8080 OR 1-800-345-3806.
(Service for the Deaf via TOO Equipment is available at t-800-345-3848,)
NOOOt987
flltient's Name
Lawrence Bensinger
RoxaMe Buffington
Judy Gass
Barbara A Klinger
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Mary Smeltzer
Roy E, Williard
oJ'
Leslie Wenrich, D,C,
#115611
AlZI'eement # Date of Servic~
180-56-3696 06-08-94
06276246 01-10-94
180-38-0693 06-17-94
184-34-1214 08-01-94
197-40-8554 10-24-94
192-30-4826 10-05-94
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19. By a series of communications beginning in 1993 and concluding shortly prior
to the date of the filing of this suit, a PBS benefits utilization management representative:
(I) notified Plaintiff of a survey PBS was conducting for the purpose of reviewing the quality
of participating providers' x-ray equipment; (2) informed Plaintiff of its concern about the
quality of his x-ray equipment; and (3) repeatedly requested that Plaintiff forward copies of
x-ray films to allow PBS to evaluate his x-ray equipment and ensure that it satisfied accepted
standards of practice. S= copies of Radiography Survey and Correspondence, attached
hereto as Exhibit D.
20. Plaintiff refused to comply with his contractual obligations to cooperate with
the benefits utilization management commillee, to provide the requested information about his
x-ray equipment to permit PBS to determine whether his equipment satisfied accepted
standards of practice.
21. By leller dated May 9, 1996, PBS informed Plaintiff that because he had failed
to satisfy his contractual obligation to forward the requested x-rays and, therefore, failed to
satisfy the x-ray quality control requirements, PBS would no longer make payment for x-rays
taken in his office and would inform PBS subscribers, through the Explanation of Benefits
routinely provided to subscribers for any benefits claim, of the reason for the denial of
payment for such services. PBS also informed Plaintiff of his right to submit the mailer to
the Medical Review Commillee. A copy of the May 9, 1996, leller to Plaintiff is attached
hereto as Exhibit E.
22. Rather than submit to the Medical Review Commillee, Plaintiff has filed this
action challenging the decision by PBS to notify subscribers through the Explanation of
5
26. The conduct of which Plaintiff complains, i.e, notifying subscribers of the
reasons for the denial of benefits, is absolutely privileged in that it is required by a provision
of the Unfair Insurance Practices Act, 40 P.S. ~1171.5(a)(10)(XIV).
27. 40 P.S. ~ 1171.5(a)(10)(XIV) provides that it is an actionable unfair claim
settlement practice to fail to promptly provide a reasonable explanation of the basis in the
insurance policy, in relation to the facts or applicable law, for denial of a claim or for the
offer of a compromise settlement.
28. 40 P.S. ~1171.6 absolutely precludes liability for statements of information
provided by any insurer in complying with the Unfair Insurance Practices Act.
29. 40 P.S. ~~1171.5 and 1171.6 are made expressly applicable as a matter of law
to PBS pursuant to 40 P.S. ~1171.3, which provides that professional health services plan
corporations are subject to the provisions of the Unfair Insurance Practices Act.
30. 40 P.S. ~~1171.5 and 1171.6 render the Explanation of Benefits sent by PBS
to subscribers explaining the reasons for the denial of payment for x-rays taken in Plaintifrs
offices absolutely privileged.
31. A defamation claim must be dismissed as a mailer of law where the Court may
determine from the face of the complaint and statutory law that the conduct complained of is
privileged.
7
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BY.LA WS OF THE MEDICAL SERVICE ASSOCIATION
OF PENNSYLVANIA
(Revised April 19, 1995)
ARTICLE--1
Narne
The charter name of the Corporation is MEDICAL SERVICE ASSOCIATION
OF PENNSYLVANIA. However, it may do business under the name of
Pennsylvania Blue Shield.
ARTICLE II
"
Pumoses
The Corporation does not contemplate pecuniary gain or profit, incidental or
otherwise, to its members. No part of the net earnings of the Corporation shall
inure to the benefit of any member or individual, and no substantial part of the
activities of the Corporation shall be carrying on propaganda or otherwise
attempting to influence legislation.
The purposes for which the Corporation is formed are:
(a) To establish, maintain and operate throughout the Commonwealth of
Pennsylvania a nonprofit medical service plan whereby medical and other services,
or certain classes or kinds of medical and other services, may be provided in
accordance with and subject to the provisions of the Professional Health Service
Plan Corporation Legislation of 1972, P. L. 1063, and any other Act or Acts,
whether heretofore or hereafter adopted, applicable to nonprofit corporations
incorporated under the authority of Section 6301, et seq., of the Professional Health
Service Plan Corporation Legislation of 1972, and which are authorized by the
aforesaid Acts.
(b) To act as a contracting agency or organization for the performance of
functions under Section 1842 ofTiUe XVIII.ofthe Federal Social Security Act, 42
U.S.C. Section 301 et seq., with power to perform all the services which may be
required of an agency or organization thereunder: to perform administrative
services similar or related to those which may be required of an agency or
organization as aforesaid, in connection with any federal, state or local
governmental health care program; to perform administrative services, similar or
,.
/
The corporatc professional members shall be allocated among the above
categories of professional members in such equitable manner as the Board of
Dircctors may determine from time to time; provided that this allocation shall
reflect substantially the ratio bctween the total numbcr of Participating Doctors in
the State in all of the above categories and the number of Participating Doctors in
cach of the abovc categories in the State.
The term of office of any duly clected Permanent Member shall not be
shortened in providing for the aforesaid number of corporatc professional members
or for the aforesaid allocation.
(b) District Professional Members. Those persons (hereinafter referred to
as district professional members) who have been elected as such from the ten
Election Districts established undcr Section 3 of this Article lV, in the manner set
forth in that section.
.
District professional members shall be divided into the following categories:
Doctors of Medicinc
Doctors of Osteopathy
Doctors of Dental Surgery
Doctors of Podiatry
Doctors of Optomctry
The total number of district professional members shall be 120 or as near to
that number as can reasonably bc achicved, consistent with the provisions of this
Article lV.
The district professional members shall be allocated among the abovc
categories of professional members and among the Election Districts in such
equitable manner as the Board of Directors may determine from time to time;
provided that:
(i) These allocations shall reflect substantially the ratio
between the total number of Participating Doctors in the State in all ofthe
above categories and the number of Participating Doctors in each of the
above categories in the State; and,
(ii) These allocations shall reflect substantially the ratio
between the total number of Participating Doctors in the State in each of the
above categories and the number of Participating Doctors in that category in
each Election District.
- 3-
Thc term of officc of any duly elccted district profcssional mcmber shall not
bc shortened in providing for the aforesaid number of district professional members
or for the aforesaid allocations.
(c) Lay Mernbers. Additional persons (hcrcinafter referred to as lay
members) who havc bcen elected as such in the manner set forth in Section 4 of this
Article IV. Lay members shall be subscribers of the Corporation and shall not be
health service doctors. The number oflay members shall be 150 or as near to that
number as can reasonably be achieved, consistent with the provision of this Article
IV. All lay members shall meet the Criteria for lay mcmbership dcveloped after
review with and concurrence by the Insurance Department and thc Department of
Health, and adopted by rcsolution by the members of the Corporation, which
Criteria shall be of such nature as to insure, among other things, that lay membcrs
arc generally representative of broad segments of the subscribers, and that their
background and experience qualify them to act in the interests of the subscribers
and the Corporation and that neither they nor their spouses derive substantial
income from the administration or delivery of health care. The term of office of any
duly elected lay member, or any Permanent Member, shall not be shortened in
providing for the aforesaid number oflay members.
(d) Permanent Members. Those persons who are professional members or
lay members of the Corporation whose term of membership began prior to the 1961
Annual Meeting of the members of this Corporation.
(e) If the President meets the criteria prescribed in Section 1 (a), (b) or (c)
for any category of corporate membership, he shall be an ex. officio member of the
Corporation of that type for all purposes.
(f) The total number of all categories of corporate members shall not
include less than fifty percent (50%) oflay members.
Section 2. Election of Corporate Professional Members. The corporate
professional members of the Corporation shall be elected by the members of the
Corporation at any annual or special meeting thereof. Nominees for corporate
professional members to be elected at any annual or special meeting shall be
submitted by the Corporate Professional Membership Nominating Committee.
That committee shall solicit names of potential nominees from the professional
societies or associations representing the various classes of health service doctors
authorized to participate in Pennsylvania Blue Shield, and from such other
individuals or organizations as it may choose. Nominees for corporate professional
members may also be submitted from the floor at any annual or special meeting of
the members.
- 4 -
The election of the district professional members allocated to the respective
Election Districts ,as aforesaid, shall be conducted in such manner and at such time
as rnay be prescribed from time to time by the Board of Directors.
Section 4. Election of Lay Members. The lay members provided for in
Section I (c) of this Article IV shall be elected by a vote of the members of the
Corporation present at any annual or special meeting of such members. Nominees
for lay members to be elected at any annual or special meeting shall be submitted
by the Corporate Lay Membership Nominating Committee. Nominees for lay
members may also be submitted from the floor at any annual or special meeting of
the members.
Section 5. Term of Membership. (a) Corporate Professional Members. The
term of membership of corporate professional members who are elected under
Section 2 of this Article IV at an annual meeting of the members of the Corporation
shall be three years beginning with the final adjournment of the annual meeting of
the members of the Corporation at which they are elected and continuing until the
final adjournment of the third succeeding annual meeting of the Corporation.
The term of membership of corporate professional members who are elected
under Section 2 of this Article IV at a special meeting of the members of the
Corporation shall begin with the final adjournment of the special meeting of the
members of the Corporation at which they are elected and shall continue until the
final adjournment of the third annual meeting of the members of the Corporation
following their election.
(b) District Professional Members. The term of membership of all district
professional members elected under Section 3 of this Article IV shall be three years,
beginning with the convening of the annual meeting of the members of the
Corporation next following their election in the various election districts and
continuing until the convening of the third succeeding annual meeting of the
members ofthe Corporation.
(c) Lay Members. The term of membership of all lay members who are
elected under Section 4 of this Article IV at an annual meeting of the members of
the Corporation shall be three years, beginning with the final adjournment of the
annual meeting of the members of the Corp.oration at which they are elected and
continuing until the final adjournment of the third succeeding annual meeting of
the members of the Corporation.
The term of membership of lay members who are elected under Section 4 of
this Article IV at a special meeting of the members of the Corporation shall begin
with the final adjournment of the special meeting of the members of the
Corporation at which they are elected and shall continue until the final
.6-
adjournment of thc third annual mecting of the mcmbers of the Corporation
following their election.
(d) Permanent Members. The term of membership of any member of the
Corporation whose term of membership began prior to thc 1961 annual meeting of
the membcrs ofthc Corporation shall continue until his death, resignation or
rcmoval.
Section 6. Removal of Members. Any member ofthc Corporation may be
removcd as a member by a three-fourths vote of the members present at any duly
convcned meeting thereof.
Section 7. Vacancies. Any vacancy occurring during the term of membership
of any member who was elected under Sections 2, 3 or 4 of this Article IV shall be
filled for the unexpired portion of that member's term in the same manner as that
followed for the original election of the member involved.
Section 8. Professional Members to be Participating Doctors and Residents ,of
the Commonwealth of Pennsylvania. Every doctor of medicine, doctor of
osteopathy, doctor of dental surgery, doctor of podiatry or doctor of optometry
elected as a corporate professional member under Section 2 of this Article IV or
elected as a district professional member under Section 3 of this Article IV must be
enrolled with the Corporation as a Participating Doctor and be a resident of the
Commonwealth of Pennsylvania at tbe time of such election, and if while serving as
a member of the Corporation he ceases to be a Participating Doctor or a resident of
the Commonwealth of Pennsylvania for any reason, his membership shall
automatically terminate.
Section 9. Lay Members to be Subscribers and Residents ofthe
Commonwealth of Pennsylvania. Every person elected as a lay member under
Section 4 of this Article IV must be enrolled with the Corporation as one of its
subscribers and be a resident of the Commonwealth of Pennsylvania at the time of
such election, and if while serving as a lay member he ceases to be a subscriber or a
resident of the Commonwealth of Pennsylvania for any reason, his membership
shall automatically terminate.
ARTICLE V
Duties and Powers of Members: Meetinl!'s
Section 1. Powers and Duties of Members. The members of the Corporation
shall have the following pOwcrs and duties:
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(a) To elect or rcmovc mcmbers in accordancc with Article IV of these
Bylaws.
(b) To elect Dircctors of the Corporation in accordance with Articlc VI of these
Bylaws.
(c) To adopt Special Resolutions as defined by Section 8 of this Article V.
(d) To determine the requisites of persons oflow income eligible for benefits
under the Corporation's subsidized health care plans.
(e) To adopt amendments to these Bylaws.
(f) To approve all fundamental changes of the Corporation, including:
amendment of the Articles of Incorporation; merger or consolidation with one or,
more other corporations; sales of all, or substantially all, of the Corporation's assets;
division of the Corporation; conversion to a business corporation; voluntary
dissolution; or any other transaction which, pursuant to the Pennsylvania
Nonprofit Corporation Law of 1988 (15 Pa.C.S. ~ 5901 et seq.), requires approval of
the members.
Section 2. Annual Meeting. The annual meeting of the members of the
Corporation shall be held during either March or April of each year at a time and
place to be determined by the Chairman of the Board of the Corporation for the
election of Directors and such other business as may properly come before said
meeting.
Section 3. Notice of Annual Meeting. Notice of the time and place of the
annual meeting shall be sent to each member of the Corporation at least fifteen
days prior thereto.
Section 4. Special Meetings. Special meetings of the members may be called
at any time by the Chairman of the Board or by a majority of the Board of Directors,
or at the written request ofiive members of the Board of Directors.
Section 5. Notice of Special Meetings. Notice of the time, place and purpose
of special meetings shall be sent to each member of the Corporation not less than
five days prior thereto. Such meetings shall be held at such time and place as may.
be designated in the notice of such meeting.
Section 6. Quorum. At all meetings of members there shall be present at
least twenty-five members in order to constitute a quorum for the transaction of
business, but less than a quorum may adjourn such meetings from time to time
without notice until a quorum is present.
- 8.
Section 7. Voting.
(a) Each member shall be entitled to one vote on each matter presented at
any meeting of the members. Unless a greater percentage of votes is required by
the Articles ofIncorporation, these Bylaws or by a governing statute, any matter
submitted to the membership shall be approved upon receiving a majority of the
votes which all members present at the meeting are entitled to cast. Members shall
not be entitled to vote by proxy at any membership meeting. The manner ofvotiDg
as to each matter shall be in person except, in matters involving amendment to the
Articles of Incorporation, if authorized by the Board of Directors, voting may be by
written ballot in accordance with the following Subsection 7(b).
(b) A written ballot shall be delivered by the Corporation to every member
entitled to vote on any matter on which members shall be authorized to vote by
written ballot. Each written ballot shall (i) set forth each proposed action for which
a written ballot has been authorized, and (ii) provide an opportunity to vote for or
against each such proposed action. Each completed written ballot mailed to the
Corporation by United States first-class mail and received by the Secretary prior to
the commencement of the meeting at which the members will act upon a proposed
action by written ballot shall be a valid vote cast upon such action, provided that a
quorum shall be present at such meeting. Only members attending a meeting in
person shall be counted toward the quorum for such meeting.
(c) Notwithstanding paragraph (b) above, no vote may be cast by mail
ballot in any election of directors.
(d) A member may personally attend and deliver a written ballot at any
meeting prior to the closing of the polls with respect to the matter on which action
will be taken by written ballot, and such written ballot personally delivered by a
member shall revoke any prior written ballot of such member with respect to the
matter to be voted upon.
Section 8. Special Resolutions. Any member of the Corporation may propose
a Special Resolution for consideration by the corporate membership at any annual
or special meeting. For purposes of these By-laws, a Special Resolution is one
which instructs the Board of Directors, in specific terms, to consider a particular
corporate action or policy and report on its decisions and actions with respect
thereto at the next meeting of the members. A Special Resolution may be proposed
for consideration at a meeting ofthe members only by a written submission filed
with the Corporate Secretary at least 60 days in advance of the meeting.
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ARTI!::LE VI
Board of Directors
Section 1. Number, Qualifications and Tenure. The business and affaiIs of
the Corporation shall be managed by a Board of Directors of at least twenty-one
members, all of whom shall be elected by the members of the Corporation, except in
the case of certain vacancies as hereinafter provided and except in the case of the
President of the Corporation as Ii member of the Board of Directors, ex-officio. All
elected Directors shall be members of the Corporation and no member shall be
nominated or elected to serve on the Board of Directors who will have attained the
age of seventy (70) on or before the date of election. Termination of a Director's
membership in the Corporation shall automatically terminate his membership on
the Board of Directors.
The number of Directors comprising the Board shall be determined, from
time to time, by majority action taken by the members of the Corporation at any
annual or special meeting thereof. No decrease in the number of Directors on the
Board shall affect the term of office of any Director previously elected.
No less than fifty percent (50%) of the total authorized number of Directors
having the right to vote shall be lay members of the Corporation who meet the
Criteria for lay membership established from time to time by resolution adopted by
the members. The remainder of the total number of Directors having the right to
vote shall be health service doctors, as defined in the Blue Shield Regulatory Act
(Act 271 of 1972; 40 Pa. S. 6301 et seq.). Health service doctors who provide
professional health services for subscribers ofthe Corporation may be Directors.
When Directors are to be elected by the members of the Corporation, a
separate election shall first be held for that number of Directors who must be lay
members, as required by these By-laws. A second separate election shall then be
held for the election of that number of Directors who must be health service doctors,
as required by these By-laws.
Except as herein provided to the contrary, each Director shall be elected to
serve for a term which shall begin immediately upon the adjournment of the annual
meeting at which the Director is elected and which shall continue until the
adjournment of the third annual meeting thereafter and until his successor has
been elected and qualified. Directors shall be eligible for reelection.
- 10-
Should the mcmbers of the Corporation at any timc incrcase or dccrease the
number of Directors, they shall specify as to how the incrcasc or decreasc in
numbcr is to be dividcd between the class of Directors who must bc lay members
and thc class who must be hcalth service doctors so as to maintain the number of
Directors rcquired by thesc By.laws in each class, and thc members shall also
designatc the initial tcrm of officc of the additional Director or Directors so as to
arrange, as nearly as possible, that one-third (1/3) of the total number of Directors
shall be elected at each annual meeting of the members.
The President of the Corporation shall be a member of the Board of Directors,
cx-officio, during his term of office, and if hc is a corporate member of the
Corporation, he shall have the right to vote as a Director and hc shall be counted in
arriving at the number ofmemb!!rs ofthc Board who shall be lay members or the
number who shall bc health servicc doctors.
Thc Chairman of the Board of Directors shall appoint a standing committee
for the nomination of Directors. This committee shall present to the members of thc
Corporation at each annual meeting appropriate nominees for thc office of Director.
Section 2. Annual Meetings. An annual meeting of the Board of Directors
shall be held without further notice than by these By-laws as soon as possible after
the annual mceting of the mcmbers of the Corporation, at which thc Board of
Directors as then constituted shall immediately elect officers for the ensuing year.
Section 3. Regular Meetings. Regular meetings of the Board shall be held
four times a year at such time and place as shall, from time to time, be determined
by the Board, and notice of the time and place shall be sent to each director at least
five days prior thereto.
Section 4. Special Meetings. Special meetings of the Board of Directors may
be called at any time by thc Chairman of the Board or by one. third of the members
of the Board at such time and place as may be designated in thc notice calling for
the meeting.
Section 5. Notice. Notice of the time, place and purposc of any special
meeting of the Board of Directors shall be sent to !!ach director at least twenty-four
hours prior thereto.
Section 6. Adjournment. When a meeting is adjourned, it shall not be
necessary to give any notice of the adjourned meeting or the business to be
transacted at an adjourned meeting other than an announcement at the meeting at
which such adjournment is taken.
- 11 -
Section 7. Quorum. A majority of thc directors in officc shall bc nccessary to
constitute a quorum for thc transaction of business, and the acts of a majority of the
directors prescnt at a mceting at which a quorum is present shall be thc acts ofthe
Board of Directors; providcd that if all the directors shall severally or collectively
consent in writing to any action to be taken by the Corporation, such action shall be
as valid corporate action as though it had been authorized at a meeting ofthe
Board of Directors.
Section 8. Resignation. Any director or other officer may resign his office at
any time, such resignation to be made in writing to take effect upon its acceptance
by the Board of Directors. .
Section 9. Removal. Any member of the Board of Directors may be removed
for any proper cause by a two-thirds vote of the entire Board of Directors of the
Corporation taken at any regular or special meeting, provided that each director
has been given tcn days written notice that such action is to be considered at the
meeting involved.
Section 10. Vacancies. Any vacancy in the Board of Directors caused by the
death, resignation or removal of a director before the expiration ofhis term and
occurring in the interim between annual membership meetings shall be filled by a
majority vote of the remaining directors, although less than a quorum, taken at any
regular or special meeting thereof. The director so elected shall serve until the next
annual meeting of the membership, at which time the vacancy so created shall be
filled for the remaining uIlexpired term, if any, by the membership. Only persons
mecting the qualifications set forth in Section 1 of this Article may be elected to fill
a vacancy on the Board of Directors.
Section 11. Emeritus Director. The Board of Directors, in accordance with
the criteria established by the Board, may elect by a unanimous vote, a retiring
Director to non-voting Emeritus Director status for unusual and outstanding
service to the Corporation. A person who has served on the Board of Directors for
at least 10 consecutive years and has chaired one or more standing Board
committees is eligible for election to Emeritus Director status by the Board of
Directors. A member of the Board of Directors is ineligible for election to Emeritus
Director status by the Board of Directors during the member's term of office.
The Chairman ofthe Board of Directors shall from time to time appoint an ad
hoc nominating committee composed of the Chairman of the Board, Chairpersons of
each of the Board of Directors Nominating Committee, the Corporate Lay
Membership Nominating Committee, the Corporate Professional Membership
Nominating Committee, and the President of Pennsylvania Blue Shield for the
nomination of Emeritus Directors. Recommendations for nominations may be made
by Board members or by senior officers ofthe Corporation. Nominations for election
- 12 -
Committee shall bc dctcrmincd, from timc to time, by majority action ofthc Board
of Directors.
No less than fifty (50%) percent of the total authorized number of Directors
serving on the Executive Committec shall be Directors who arc lay members ofthc
Corporation. The remainder of the total number of Directors serving on the
Executivc Committee shall be health service doctors, as defined in the Bluc Shicld
Regulatory Act (Act 271 of 1972; 40 Pa. S. 6301 et seq.);"provided, however, that
the Chairman of the Board and the First Vice Chairman of the Board shall be
members ofthe Executive Committee, ex-officio, with the right to vote, and that
they shall be counted in arriving at the number of members of the Executive
Committee who shall be lay members and the number who shall be health service
doctors.
When Directors are to be elected to serve on the Executive Committee, a
separate election shall first bc held for that number who must be lay members, as
required by these By-laws. A second separate election shall then be held for the
election of that number of Directors who must be health service doctors, as required
by these By-laws.
The President of the Corporation shall be a member of the Executive
Committee, ex-officio, during the term of his office, and ifhe is a corporate member
of the Corporation, he shall have the right to vote as such member and he shall be
counted in arriving at the number of members of the Executive Committee who
shall be lay members or the number who shall be health service doctors.
Section 2. The Executive Committee shall have and exercise the powers of
the Board of Directors when the Board is not in session, excepting such powers as
may, by law or these By-laws, be required to be exercised by the Board and further
excepting such powers as the Board may expressly reserve for itself. The Chairman
. of the Board shall preside at meetings of the Executive Committee and in the event
of his inability or refusal to act, the First Vice Chairman of the Board shall act as
such Chairman.
Section 3. A majority of the members of the Executive Committee shall be
necessary to constitute a quorum for the transaction of business, and the acts of a
majority of the members present at a meeting at which a quorum is present shall be
the acts of the Executive Committee; provided that if all the members consent in
writing to any action to be taken, such action shall be as valid as though it had
been authorized at a meeting of the Executive Committee.
Section 4. The Executive Committee shall keep regular minutes ofits
proceedings and report the same to the Board at its next regular meeting, or when
requircd.
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Section 5. .The Executive Committcc shall mcet rcgularly on a datc
approximately midway between cach rcgularly scheduled Board of Directors
meeting, except that the Chairman of the Board may cancel any such meeting if
there is insufficient pending business to justify holding it. Spccial meetings of the
Executive Committee may be callcd at any time by the Chairman of the Board or by
any three of the elected members of the Executive Committee.
ARTIQLE.I'lC
Advisorv Councils
Section 1. Organization. The Board of Directors may organize one or more
Advisory Councils on either a statewide basis, a district basis, or both. If Advisory
Councils are organized on a district basis, the Board of Directors shall divide the
state into districts for this purpose.
Section 2. Mernbers. The Board of Directors shall fix the number of
councilors to serve on each Advisory Council, select these councilors and determine
their tenure.
Section 3. Qualifications. Any person offull age and a citizen ofthe
Commonwealth of Pennsylvania, including members or officers ofthe Corporation,
shall be qualified to serve as an advisory councilor.
Section 4. Duties. The Advisory Council may by a majority vote of its
members makc recommendations to the Board of Directors with respect to the
general charge and management of the affairs of the Corporation.
ARTICLE X
DisDutes and Controversies Involvinl! Providers
Section 1. Dispute Resolution. All matters, disputes or controversies arising
out of the relationship between the Corporation and professional health care
providers (hereafter in this Article referred to as "providers") who render health
services to the Corporation's subscribers, including any questions involving
professional ethics, shall be considered and determined by the appropriate one of
the two Review Committees established under this Article.
- 15-
Section 2. Medical Review Committee. There shall be a Medical Review
Committee consisting of at least eight (8) members, each of whom shall be
appointed by the Chairman of the Board of Directors oftheCorporation and each of
whom shall serve until his or her successor is appointed. A majority of the
members of the Medical Review Committee shall be providers who are members of
the Corporation, and the balance of the members shall be members of the
Corporation who are subscribers to health care contracts entered into with the
Corporation.
Section 3. Dental Review Committee. There shall be a Dental Review
Committee consisting of at least eight (8) members, each of whom shall be
appointed by the Chairman of the Board of Directors ofthe Corporation and each of
whom shall serve until his or her successor is appointed. A majority of the
members of the Dental Review Committee shall be dentists who are members of the
Corporation, and the balance of the members shall be members ofthe Corporation
who are subscribers to health care contracts entered into with the Corporation.
Section 4. Officers of Review Committees. The Chairman of the Board of
Directors of the Corporation shall appoint two officers for each Review Committee: a
Chairperson, who shall be one of the members of the Committee, and a Secretary,
who shall not be a member of the Committee but shall be an employee of the
Corporation. The Chairperson shall preside at all meetings of the Committee, but
shall not vote in any matter being considered by the Committee except when
necessary to break a tie. The Secretary shall perform the duties enumerated in
Sections 7 and 8 ofthis Article X, and such other duties as the Chairperson ofthe
Committee shall assign.
Section 5. Review Committee Meetings - Quorum. Each Review Committee
shall meet at a call of the Chairperson of the Committee. Meetings of each Review,
Committee may also be called for any appropriate date, time and place by any three
(3) members of the Committee involved. The date, time and place of each meeting
of a Review Committee shall be set forth in a written notice which shall be sent to
each member of the Committee a reasonable time in advance of the meeting.
A majority of the members of a Review Committee who are providers shall
constitute a quorum for the transaction of business and the acts of a majority of
such members present at a meeting at which a quorum is present shall be the acts
of the Review Committee. If the members of a Review Committee shall severally or
collectively consent unanimously in writing to any action proposed to be taken by
the Comnuttee, such action shall be as valid an action as though it had been taken
by the Committee at a duly convened meeting.
- 16-
, Section 6. Submission of Matters to the Rcview Committee. Matters may be
submitted to a Review Comrnittee by anyone of the following:
(a) Any member ofthc Corporation or ofthc Board of Directors of the
Corporation;
(b) The Subscribcr Advisory Council of the Corporation or the Professional
Advisory Council of the Corporation:
(c) The Secretary or any member of a Review Committee;
(d) Any Participating Provider or Preferred Provider.
All matters to be submitted to a Review Committee shall be set forth in
writing and delivered to the Secretary ofthe Review Committee involved. The
Review Committees shall maintain written procedures to assure that all providers
receive full and fair consideration of any issues presented to the Committees.
Section 7. General Proceedings Before a Review Committee. The
Secretary of each Review Committee shall prepare an agenda of the matters to be
considered at each Committee meeting. Each provider involved in a matter before
the Committee shall be provided with a written summary of that matter a
reasonable time in advance of the meeting, and shall have the right to appear
before the Committee at the meeting. Each member of the Committee shall be
provided with the summaries of all matters to be considered at the meeting. No
member of a Review Committee shall participate in a Review Committee's
deliberations or vote, where that same member also served as an adviser to the
Corporation regarding the matter under review, unless expressly requested to do so
by the provider under review.
In considering any matter brought before it a Review Committee shall have
authority to take anyone or more of the following actions:
(a) Refer the matter to the other Review Committee for appropriate action.
.
(b) Refer the case for recommendation or action by any appropriate
committee, board or division of the State Professional Society or Local Professional
Society ofthe provider involved.
(c) Refer the matter to an appropriate law enforcement officer or agency of
the Federal, State or any Local Government if the Committee has probable cause to
believe that the provider involved secured payment from the Corporation for
- 17 -
services performed by the provider for a subscriber on the basis of material false
information submitted to the Corporation with the intention of defrauding it;
(d) Refer the matter to the State Professional Licensure Board of the provider
involved;
.
(e) Render a finding that the Corporation is entitled to a refund of fees
paid to the provider.
(f) Render a finding that authorizes the Corporation to collect any refund
by withholding future payments due from the Corporation to the provider involved.
(g) If a particular matter involves conduct which would justify denying a
provider registration as a Participating Provider, or termination of a provider as a
Participating Provider of the Corporation, the Committee may direct that a hearing
be held in accordance with Section 8 of this Article X to consider the provider's
participating status. Such conduct may include:
(i) Violation of the Participating Provider's Agreement;
(ii) Violation ofthe regulatory legislation applicable to the
Corporation;
(ill) Violation of the Regulations for Participating Providers of the
Corporation;
(iv) Refusal to adhere to the billing, payment, or service benefit
provisions of any health plan in which the provider participates;
or
(v) Violation of Federal or State criminal statutes.
(h) Render such decision or take any other such action as may be necessary
or appropriate to fully resolve any dispute presented to the Committee.
Section 8. Proceedings Involving Status of a Provider as a Participating
P.rovider. The procedures set forth in this section apply in all cases relating to the
status of a provider as a Participating Provider of the Corporation. In all such
cases, the Secretary of the Committee shall request legal counsel to the Corporation
to prepare an appropriate Complaint setting forth the allegations against the
provider. The Chairperson shall promptly fix a time, date and place for a hearing.
The provider involved shall be given at least fifteen (15) days written notice by the
Secretary of the Committee of the date, time and place of such hearing, and shall be
furnished with a copy of the Complaint. The provider shall be allowed to file a
- 18-
written Answcr to thc Complaint, provided such Answer is filcd with thc Sccrctary
of the Committee at lcast five (5) days prior to thc hearing. At thc hearing, such
witncsses may be hcard and such evidencc may bc rcccived as is deemed to bc
rclcvant and of reasonablc probative valuc; providcd, howevcr, that formal rules of
cvidencc nced not bc followcd. The provider affected by the Complaint shall bc
afforded a reasonable opportunity to be heard before the Committee, either in
person or by counscl, and to produce evidence and witnesses at such hearing. All
testimony shall be stenographically rccordcd and a complctc record shall be kept of
thc hcaring.
After the hearing, thc Review Committee, by majority vote of those members
who are providers, shall take whatever action it deems appropriate, based on the
evidence and testimony produceli at the hearing and, if such action involves either
the denial of registration as a Participating Provider, or suspension or termination
of a provider's participating status, the matter shall be promptly referred to the
Secretary of Health of the Commonwealth of Pennsylvania for approval odor such
other action as the Secretary may deem appropriate.
Section 9. Reports by the Review Committee. Each Review Committee shall
report at least ,once every six (6) months to the Board of Directors of the Corporation
respecting its activities under this Article X.
ARTICLE XI
Limitation of Liabilitv and
Indemnification of Dircctors. Officers
and Othcr Authorized Reoresentatives
Section 1. Limitation of Diiector's Liability. A Director shall not be
personally liable for monetary damages for any action taken as a Director, or any
failure to take any action, unless:
(a) The Director has breached or failed to perform his duty as a Director of
the Corporation; and
(b) The Director's breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
The provisions of this Section shall not apply to the responsibility or liability
of a Director pursuant to any criminal statute or the liability of a Director for the
payment of taxes pursuant to local, state or federal law.
- 19-
Scction 2. Indcmnification of Authorizcd Reprcsentatives. The Corporation
shall indcmnify to the full cst extcnt now or hereafter permittcd by law any person
who was or is an authorized rcpresentative of the Corporation and who was or is a
party or is threatencd to be made a party to any proceeding because such person
was or is an authorized representative of the Corporation, against any liabilit},
actually and reasonably incurred by such person in connection with such
proceeding.
Section 3. Advancing Expenses. The Corporation shall pay any expenses
incurred by an authorized rcpresentative in advance of the final disposition of any
proceeding upon agreement by the authorized representative to repay such amount
if such person is ultimately not entitled to be indemnified by the Corporation.
Section 4. Scope of Article. The indemnification of authorized
representatives or advancement of expenses, as authorized by this Article, shall (1)
not be deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any contractual indemnification
agreement, both as to action in an official capacity and as to action in another
capacity while holding that office, (2) continue as to a person who has ceased to be
an authorized representative, and (3) inure to the benefit of the heirs and personal
representatives of such a person.
Section 5. Definitions. As used in this Article:
(a) "Authorized representative" shall mean a director, officer, employee or
agent of the Corporation, or a person serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise;
(b) "Proceeding" shall mean any threatened, pending or completed third-
party or derivative action, suit or proceeding, whether civil, criminal,
administrative or investigative, or any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor;
(c) "Liability" shall mean any judgment, amount paid in settlement, fine,
penalty, or expense of any nature including attorneys' fees; and
(d) "Expenses" as used in this Article XI, Section 3 and Section 4 shall mean
any costs, fees or expenses of any nature including attorneys' fees.
.20 -
ARTICLE XII
Officers
Section 1. Executive Officers. The principal officers of the Corporation shall
be a Chairman of the Board, a First Vice Chairman of the Board, a Second Vice
Chairman of the Board, a Third Vice Chairman of the Board, a President, a
Treasurer, a Secretary, and such Senior Executive Vice Presidents, Executive Vice
Presidents or Senior Vice Presidents as the Board of Directors may from time to
time determine. The Board of Directors, by resolution, may provide for other
officers, including one or more Assistant Treasurers and one or more Assistant
Secretaries. All of the aforesaid officers shall be elected by the Board of Directors.
Any two or more offices may be held by the same person, except that the offices of
the Chairman of the Board and President, Chairman of the Board and Secretary,
Chairman of the Board and Treasurer, President and Secretary and President and
Treasurer may not be held by the same person.
(a) Chairman of the Board. Only members of the Board of Directors shall be
qualified to be elected to the office of Chairman of the Board. The Chairman of the
Board shall have general supervision over the carrying out of the policies adopted
or approved by the Board. He shall preside at all meetings ofthe members of the
Corporation, of the Board of Directors and of the Executive Committee, and, in
general, shall perform all duties incident to the office of Chairman of the Board and
such other duties as may be prescribed by the Board from time to time. He shall
have power to call meetings of the voting members of the Corporation, of the Board
of Directors and of the Executive Committee.
(b) Vice Chairmen of the Board. Only members of the Board of Directors
shall be eligible for election to the office of First Vice Chairman of the Boara,
Second Vice Chairman of the Board and Third Vice Chairman of the Board. In the
absence of the Chairman of the Board or in the event of his inability or his refusal
to act, the Vice Chairmen of the Board, in the order of their seniority, shall perform
the duties ofthe Chairman of the Board and, in so acting, shall have all the powers
of and be subject to all restrictions incident to the office of Chairman of the Board.
Each Vice Chairman of the Board shall perform such other duties as may, from
time to time,'be assigned to him by the Board or by the Executive Committee.
(c) President. The President shall be the chief executive officer of the
Corporation and as such shall be responsible for the direct a<lmini~tration,
supervision and control of all operating procedures of the Corporation. He shall act
in the capacity of administrator of the affairs of the Corporation, as directed by the
Board of Directors or by the Executive Committee.
- 21 -
(d) Scnior Executivc Vice Prcsident, Executivc Vice Presidcnts and Scnior
Vice Presidents. Thcse officcrs nccd not be members of thc Corporation. They shall
perform such dutics as, from timc to timc, may be assigncd to them by the
President. In thc absence of the Prcsident or in the evcnt of his inability or refusal
to act, the Scnior Executive Vicc Prcsident shall pcrform thc duties of the President
and, in so acting, shall have all thc powers of and be subject to all restrictions
incident to the office of Prcsident.
(e) Treasurer. The Treasurer need not be a member of the Corporation. The
Treasurer shall, under thc direction of the Board, have general charge and custody.
of and be responsible for all funds and sccurities of the Corporation and make such
reports of its receipts and disbursemcnts in such form and manner as the Board
may direct. The Treasurer shall'rcceive and give receipts for moneys due and
payable to the Corporation from any source whatevcr and deposit such moneys in
the name of the Corporation in such banks, trust companies and other depositories
as shall be selected in accordance with the provisions of these By-laws. In general,
he shall perform all the duties incident to the office of Treasurer and such other
duties as may, from timc to time, be assigncd to him by the President. In the event
of the temporary absence or disability of the Treasurcr, his duties may bc
performed by an Assistant Trcasurcr or a Scnior Vice Prcsidcnt.
({) Secretary. The Secretary need not be a member of the Corporation. The
Secretary shall keep the minutes of the meetings of the members of the Corporation
and of the Board of Directors and of the Executivc Committee in one or more books
provided for that purpose, shall notify members of the Corporation and the Board of
Directors of their election, shall see that all notices are duly given in accordance
with the provisions of these By-laws, be custodian of the corporate records and of
the seal of the Corporation, and sce that the seal of the Corporation is affixed to all
instruments and documents, the execution of which has been authorized by the
Board of Directors or the Executivc Committee, shall keep a record of the post office
address of each member of the Corporation and of the Board and of the Executive
Committee and the Advisory Councils and in general shall perform all duties
incident to the office of Secrctary and such other duties as from time to time may be
assigned to him by the President. In the absence of the Secretary or his inability to
act, an Assistant Secretary shall discharge the duties of the Secretary.
(g) Assistant Treasurers and Assistant Secretarics. Assistant Treasurers
and Assistant Secretaries need not be members of the Corporation. They shall
perform such duties as from time to time shall be assigned to them by the Treasurer
or Secretary, respectively, or by the Chairman ofthe Board with the approval of the
Board of Directors or the Executive Committee.
- 22.
Section 2. 'Subordinate Officers. The Board of Directors may appoint
subordinate officers or agents of the Corporation who shall hold their offices subject
to the pleasure of thc Board.
Section 3. Elcction and Tcrms of Office. The Chairman of the Board and the
three Vice Chairmen of the Board shall be elected annually by the Board of
Dircctors at the annual rneeting of the Board. If clection of officcrs shall not be held
at such meeting, such election shall be held as soon after as may be convenient.
Vacancies may be filled and new offices created and filled at any meeting of the
Board. The Chairman of the Board and the three Vice Chairmen of the Board shall
hold office for one year, or until their respective successors are elected and
qualified. The President, Senior Executive Vice President, Executive Vice
Presidents, Senior Vice Presidents, Treasurer, Secretary, Assistant Secretaries and
Assistant Treasurers shall hold their respective offices subject to the pleasure of the
Board.
Section 4. Removal. Any officer or agent elected or appointed by the Board
of Directors may be removed by the Board of Directors whencver in its judgement
the best interest of the Corporation would be served thereby.
Section 5. Vacancies. Vacancies in the offices of the Chairman of the Board
and any Vice Chairman of the Board may be filled by the Board of Directors for the
unexpired portion of the terrn.
Section 6. Compensation. All members of the Corporation may be
compensated for their services in attending regular or special meetings ofthe Board
of Directors, meetings of the committees of the Corporation or of the Board of
Directors, or meetings of ad hoc committees and for their services when serving
officially on a specific assignment by the Board of Directors, the Executive
Committee, the Chairman of the Board or the President, in such reasonable amount
as may from time to time be determined by the Board of Directors. The Chairman
of the Board, the Vice Chairmen of the Board, the President, or any Senior
Executive Vice President, Executive Vice President or Senior Vice President may be
compensated in such reasonable amount as the Board may from time to time
determine. The compensation of all other officers and assistant officers shall be
fixed from time to time by the President, or by such of his subordinates as he may
designate. No officer who is a member of the Board may vote upon his own
compensation as officer.
Section 7. Bonds. The Board of Directors may require any officer to give
bond and security in such sum and with such surety or sureties as the Board shall
determine, provided that the Treasurer and the President shall at all times be
bonded in such sum and with such surety or sureties as the Board shall determine.
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ARTICLE XIII
Comrnittees
Section 1. Appointment of Committees. The Chairman of the Board shall
establish such committees, and appoint their respective Chairperson, Vice
Chairperson, and members thereof, as he may deem necessary or as shall be
directed by the By-laws, the Board of Directors, the Executive Committee or by vote
of the members of the Corporation. The Chairman of the Board shall appoint to
such committees participating health service doctors (as defined in Act 271 of 1972;
40 Pa. S. 6301 et seq.) and subscribers whose background and experience indicate
that they are qualified to act in the best interests of subscribers and the
Corporation. Except as prohibited by law or Board policy, the Chairman of the
Board may appoint to committees, subscribers or participating health service
doctors who are not members of the Board or members of the Corporation, but such
individuals may not constitute a majority of any committee.
Section 2. Quorum. Except as otherwise provided in Section 5 of this Article
XIII, one-third (1/3) of the members comprising any committee appointed under
authority of Section 1 of this Article XIII shall be necessary to constitute a quorum
for the transaction of business, and the acts of a majority of the members present at
any meeting at which a quorum is present shall be the acts of the committee;
provided that if all the members consent in writing to any action to be taken, such
action shall be as valid as though it had been authorized at a meeting of the
committee.
Section 3. Corporate Lay Membership Nominating Committee. There shall
be included among the committees appointed by the Chairman of the Board a
standing committee of at least six (6) lay members of the Corporation to make
nominations of individuals for election to fill vacancies in the lay membership of the
Corporation. All appointments to this committee 'shall be approved by the Board of
Directors. This committee shall, at least fifteen days before each annual or special
meeting of the members, nominate the requisite number of individuals for election
to fill such vacancies in the lay membership as there are to be filled at such
membership meeting.
Section 4. Corporate Professional Membership Nominating Committee.
There shall be included among the committees appointed by the Chairman of the
Board a standing committee of at least six (6) health service doctors who are
- 24-
members of the Corporation to make nominations of individuals for election to fill
vacancies in the corporate professional membership of thc Corporation. All
appointmcnts to this committcc shall be approvcd by thc Board of Directors. This
committee shall, at least fifteen days beforc each annual or special mceting of thc
members, nominate the requisite number of individuals for election to fill such
vacancies in the corporate professional membcrship as there are to bc filled at such
membership meeting.
Section 5. Quorum. A majority of the members of each Corporate
Membership Nominating Committee under Sections 3 and 4 of this Article XIII
shall be necessary to constitute a quorum for the transaction of business, and the
acts of a majority of thc members present at a meeting at which a quorum is
present shall be the acts of such committee; provided that if all the members
consent in writing to any action to be taken, such action shall be as valid as though
it had been authorized at a meeting of such committee.
ARTICLE XIV
Contracts. Loans, Checks. Denosits. Investments and Annual Audit
Section 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
subscription agreement or instrument in the name of and on behalf of the
Corporation and such authority may be general or confined to specific instances.
Section 2. Loans. The Board of Directors shall have authority to borrow
money; provided, however, that the Finance Committee shall have authority to
establish lines of credit or otherwise authorize borrowing on behalf of the
Corporation in amounts not to exceed fifteen-million dollars ($15,000,000.00) in the
aggregate and that the President, Treasurer or an Assistant Treasurer, shall have
authority to draw on such lines of credit, execute loan documents, or take any other
necessary or appropriate action relating to authorized borrowing on behalf of the
Corporation.
Section 3. Checks. All checks, drafts, or other orders for the payment of
money, notes or other evidence of indebtedness shall be issued in the name of the
Corporation and shall be signed by such officer or officers, agent or agents, of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation, not otherwise employed,
shall be deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the President or a Senior Vice President,
- 25-
together with the Treasurer, may designate. Notice of the addition of any bank,
trust company, or other depository shall be provided to the Board of Directors.
Section 5. Investments. The funds of the Corporation equal to its reserves
shall, subject to the provisions of the Professional Health Service Plan Corporation
Legislation of 1972, P. L. 1063, be invested in compliance with the requirements set
forth for the investment of capital and reserves of life insurance companies. The
funds of the Corporation equal to its surplus, subject to the Professional Health
Service Plan Corporation Legislation of 1972, P. L. 1063, be invested in compliance
with the requirements for the investment of surplus of life insurance companies.
Section 6. Annual Audit. The accounts of the Corporation shall be audited
at least once a year by a certified public accountant recommended by the Audit
Committee and appointed by the Board.
ARTICLE XV
Notice and Conduct of Meetinos
Section 1. Written Notice. Whenever written notice is required to be given
by any person under the provisions of any statute or by these By-laws, it may be
given to such person by sending a copy through the mail or by telegram, charges
prepaid, to his address appearing on the books of the Corporation or supplied by
him to the Corporation for the purpose of notice. Such notice shall specify the
place, date and hour of the meeting and in the case of a special meeting, the general
nature of the business to be transacted.
Section 2. Written Waiver of Notice. Whenever any written notice is
required as aforesaid, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Except in the case of a special
meeting, neither the business to be transacted nor the purpose of the meeting need
be specified in the waiver of notice of said meeting.
Section 3. Waiver of Notice by Attendance. Attendance of a person in person
at any meeting shall constitute a waiver of notice of such meeting except when a
person attends the meeting for the express purpose of objecting to the transaction of
any business because the meeting has not been lawfully called or convened.
Section 4. Parliamentary Procedure. All meetings of the members, the
Board of Directors or the committees of the Corporation shall be governed by the
parliamentary rules and usages contained in the then current Robert's Rules of
Order.
- 26.
"
.
@ UI,:)._)~ ""'" ....~... 'IwOn~.;'t'-""
REGULATIONS FOR PARTICIPATING PROVIDERS
A. REGISTRATION OF PARTICIPATING PROVIDERS
1. Any health selVice docto, 0' ancillaty provider duly authorized to p,actice es such under Ihe applicable laws
of Ihe Commonwealth 01 Pennsylvania Is entilied 10 registe, with Pennsylvania Blue Shield, (heraafte, re-
ferred to as Blua Shield), as e Participating Provider and to continue participation. upon maintaining e
current license and upon complying with these Regulations es amended I,om time 10 time with epproval of
the Pennsylvania Department of Health, Any such amendments will be reproduced In the~ entirely In Blue
Shield's p,ofessional publications within Ihe calenda, quarte, Immediately following the~ epproval or In eny
othe, manne, approved by the Department of Heallh, and will become effective 30 days after their publica-
tion.
2. Applications fo, regist,ation as a Participating Provide, shall be submitted to Blue Shield on forms provided
by II 10' such purpose, such form 10 be signed by the provider making application and to contaln such
Info,mation as the form may indicate.
3, The 'egist'ation of any p,ovider as a Participating P,ovide, shall be conditioned upon his execution end
delivety 10 Blue Shield of the Participating Provide,'s Agreemenlln effect althe time.
4. Blue Shield may, fo, prope' cause, ,efuse to place Ihe name of any provide, upon its register 01 Participating
Provide,s with the approval of the Pennsylvania Departmenl 01 Heallh,
5. The ,egist,ation 01 any provider as a Participating P,c.vide, shall be effective Immediately upon acceptance
by Blue Shield of his applicalion, and Blue Shield shall promptly supply to the provider an appropriate sign
0' certificate to display in his professional office evidencing his ,egistration as a Participating Provide"
6, A provider's ,egistration wilh Blue Shield as a Participating Provide, shall continue until such time as his
resignation becomes effective by giving written notice to Blue Shield and such resignation shall become
effective 30 days alte, receipt by Blue Shield of such written notice.
7. Blue Shield may suspend or terminate the registralion of a Participating Provide, fo, p,oper cause, but only
with the approval of the Pennsylvania Department of Hoallh, Action may not be laken by Blue Shield 10
te,minate 0' suspend the 'egistration 01 any Participating Provide, until the Provide' has been ellorded an
opportunity to be heard and bo 'opresenled by counsel at a hearing held by Blue Shield In the manne'
provided by Article X of the By-laws of Blue Shield, which Is rep,oduced as Appendix A, and the Review
Committee Guidelines, which are ,eproduced as Appendix B,
8, Evety Participating Provide, 01 Blue Shield whethe, heretofore 0' herealler registe,ed as such, shall when
,equested by Blue Shield, execute and deliver 10 Blue Shield a revised Participating P,ovide,'s Ag,eement
'enecting changes in the law applicable 10 Blue Shield 0' duly epprovod changes In its mode of ope,ation, if
such revised Participating Provider's Agreement has been app,ovod by tha Departmant 01 Heallh,
g, Only individual providers may be 'egislered as Participating P,ovide,s of Blue Shield, A Participating Pro-
vide, may essign his ,ights to payment for covered services performed fo, Blue Shield subscribers only in
ecco,dance with such procedure es Blue Shield may p,escribe In the Asslgnmont Account Guidelines.
which e,e ,ep'oducod as Appendix C.
10, Each Participating Provider shall promptly adviso Bluo Shield of any change In the edd,ess of his p,oles-
sional office or place of practice.
3'601/11'
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.
to
i
111.11
B. GENERAL REGULATIONS
1. Participating P,ovlders of Blue Shield must partlclpale In all Blue Shield P,ograms under which they provide
cove,ed services excepl Ihose programs which have been delermlned by the Departmenl of Health to
roqulre thai, own unique participation agreements.
2, Tha Subsc,lptlon Agreements and Masler Contracls may be changed 0' supplamented I,om time to time
whan deemad advisable by Blue Shield in o,de, 10 ,ellect changing conditions, p,ovldad thai such changas
or supplements e,e approved by the Pennsylvania insurance Department.
3. Participating Provide,s shall submit ell claims fo, payment fo, services performed fo, Blue Shield subsc,lb.
e,s upon the claim form p,ovlded by Blue Shield. The utilization of e fo,mal olher than this claim form must
receive p,lor approval from Blue Shield, The Information roqulred by Ihe form shall be set lorth end the lorm
shall be signed 0' verified by Ihe provider In such manne, as Blue Shield may p,esc,ibe.
4. To Ihe g,ealesl extenl possible, Participating P,oviders shall report services In terms of the procedure codes
IIsled In the Blue Shield P,oeedu,e Terminology Manual, In unusual cases, a description of service, e copy
of tha hospital ,ecords, 0' olhe, approprlala documenlatlon should be submitted.
All claim forms fo, covered services performed fo, Blue Shield subscribe,s shall ba submitted es soon as
possible, bulln no evenllale, than one yea, atte, the date 01 performance of the services Involved, unless
an extension oflhls pe,iod Is granled by Blue Shield ellhe ,equest of the Participating Provider, Charges fo,
services 'ejecled as being ove' the time limit shall nol be collecled Irom the subscribe"
A Participating Provide, performing cove,ed services lor a Blue Shield subscriber shall be fully and com.
pletely responsible fo, all slalemenls made on any claim lorm submitted to Blue Shield with respeclto such
services. ,ega'dless of Ihe mode of execution or verilicalion 01 such report which may be accepled by Blue
Shield, A Participating P,ovide, who misreports services to Blue Shield shall be ,esponsible fo, relmbu,sing
Blue Shield 10' ell paymenls which were causud by such misreporting,
;,
7. A Participating P,ovide, shall not bill 0' collecl I,om a subscriber, or Irom Blue Shield, cha'ges itemized and
distinguished f,om the professional services provided, Such charges Include, but a,e not limited to. mal.
p,actlce su,cha'ges, overhead fees or facllily lees. 0' lees 10' completing cfaim fo,ms 0' submitting eddi.
tlonallnlo,matlon to Blue Shield.
6, A Particlpaling Provide, performing covered services 10' Blue Shield subscribe,s Is not an employee of Blue
Shield and Blue Shield shall do nothing 10 interfere with the cuslomary provide,.patlenl relationship In such
cases, Blue Shield shall not be liable or responsible 10 anyone 0' any person whatsoeve, as e resull 01 any
negligence, misfeasance, malleasance. nonleasance or malp'actice on Ihe part of any Participating Pro.
vide, performing services fo, Blue Shield subscribers,
g, Tha delerminatlon as to whethe' any covered service meels accepled standa,ds of p,actlce In the commu.
nity shall be made by Blue Shield In consultation with providers engaged In actlva clinical p,actlce, Fees fo,
cove,ed services deemed not to meet accepted slandards 01 practice shall not be collecled f,om the sub-
scribe,.
10, A Participating P,ovide, shall rende, covered services in Ihe most cost ellectlve manne' and In Ihe least
costly setting 'oqulred for Ihe appropriate Ireatment 01 the subscriber, A Participating P,ovlde, shall bill Blue
Shield 10' cove'ed serVices perfo,med lor Blue Shield subscribe,s only if such services are medically neces.
sary, The delerminatlon es to whelhe, any covered service Is medically necessary shall be made by Blue
Shield In consullatlon with provide's engaged In aclive clinical practice, When eve, payment c,iferla relaled
10 cost ellecliveness 0' medical necessity are developed, they will be made available to Participating Pro.
vide,s In Blue Shield's professional publications, Fees lor covered services deemed not medically necessary
shall not be collecled from the subscriber. unless Ihe subscriber ,equests Ihe servlce(s). and Ihe Partlclpal.
Ing Provider Informs the subsc,ibe, of hislhe, Ilnanclalllabllily and the subscribe, chooses to ,eceive Ihe
service(s), The Participating P,ovide, should document such notlficalion to the subscriber In his ,ecords,
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ttl.l2
II, Blue Shield will not Interfere with a subse,iber's choice 01 a p,ovide, to parfo,m cove,ed services 10' him
alte, thai choice has been made, Any Participaling Provider shall have Ihe righlto reluse to perform se,.
vices 10' eny Blue Shield subsc,iber 10' cause sallsfactory 10 him provided Ihat such ,elusalls not merely
because the palientls e Blue Shield subscriber, '
12. A Particlpaling Provide, may, at all limes, bill a Blue Shield subscriber lor non.covered services,
13, The determinalion as to whethe, any services performed by a Partlclpaling P,ovide, lor e Blue Shield sub.
scriber ara covered by a Blue Shield Agreement and the amount 01 paymenl fo, such services shall be
made by Blue Shield,
14, All covered services provided 10' Blue Shield subscribe,s by Partlclpaling P,ovide,s shall be performed by
such p,oviders eithe, pe,sonally or unde, their direct personal supervision, Direct personal supervision reo
quires that a provider be In Ihe Immediate vicinity to perform 0' 10 manage the procedure pe,sonally, n
necessary,
15, Each Participating Provider shall pe,mit Blue Shield ,ep,esentatlves to make ,easonable examination 01 his
clinical ,eco,ds, Including X.rays, 'elaling 10 any covered service perfo,med 10' Blue Shield subsCtlbers,
when such examinallon is necessary to ,esolve any queslion concerning such services,
16, Upon p,io, ,equest by Blue Shield, Particlpaling P,oviders agree to take p,e. and/or post-operative X.reys
and submit tissue for examination by a pathologist. Such procedures shall be performed In accordance with
accepted standards 01 p,aclice In the medical and dentat communllies,
17, Each Participaling Provide, shall cooperate with utilizalion commillees, 0' othe, slmila~ commillaes, estab.
lished by his state society, and sub'dlvision thereof, 0' by Blue Shield,
18, A Participating P,ovider is prohibited from paying or 'ecelving e lae, ,ebate or any otha, consida,alion In
return lor 'eferring a Biua Shiald subscriber to anolhe, provider, 0' In ,eturn 10' furnishing services to a
subscriber ,elerred to him by another provider.
19. In Ihe event any Participating Provider has received eithe, I,om Blue Shield 0' I,om the subscribe" an
amount In excess 01 the emount determined by Blue Shield to be payable to him with 'espectto services
performed 10' the subscribe" such excess amount shall be ,eturned promptly to Blue Shield, 0' 10 the
subscriber, es Ihe case may be,
20, All mailers, disputes 0' controversies 'elating to Ihe services perfo,med by Participating P,ovide,s or any
questions Involving professional ethics shall be considered, acled upon. disposed of llnd determined only
by providers In the manne' provided by Article X ollhe By-Laws of Blue Shield, which Is ,eproduced es
Appendix A, and the Review Commillee Guidelines, which are ,epreduced as Appendix B, If such disputes
Involve overpayments which have not been relurned to Blue Shield within thirty (30) calendar days 01 notifi.
cation 01 a Review Commitlee determination, claim payments otherwise due the Partlcipaling Providers will
be subjecl to withholding and the assessment 01 interest on the unpaid balance, The rate ollnte,est shall be
determinad In the manne' provided in the Review Commlllee Guidelines, which a,e ,eproduced as Appen-
dix B, If a Participating P,ovide, ,esigns while an overpayment Is being disputed, claim payments otherwise
due the Participating P,ovide, 10' services rendered prior to the elfectlve date 01 such resignalion will be
subject to withholding pending a linal ,esolulion 01 the malle" Any such emounts withheld by Blue Shield
will not be subject to the assessment of interest unlillhirty (30) calenda, days lollo~ng e Review Commillee
decision, Should a Review Commillee decision ,esullln the reduclion 0' the eliminalion of an overpayment
amount, any excess monies withheld will be p,omplly ,eturned to the p,ovide" A Participaling Provide, may
seek judicial review 01 an unfavorable Review Commillee decision to the extent permilted by Pennsylvania
law,
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11I,13
.I/IIfI/
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21. Every subscribe, shall be supplied wilh an appropriate idenlllicallon card and Participating P,ovlders shall
be enlltled to ,equi,e subscribe,s to p,esentthei' Idenlificatlon card when services a'e ,equested.
22. A Participating P,ovlde, shall permil Blue Shield representetives 10 make reasonable examination of his
financial ,ecords Insola, es It relales to delermining app,op,late reimbursement levels. usual cha'ges 0' the
cosls associated wilh high costlechnology equipment.
23, In ,egard 10 certain fee schedule programs which Include Income limits end certeln UCR p'ograms which
include Income limits. a Participating P,ovlder shall perlorm covered services without making en additional
cha'ge above the fee paid by Blue Shield (except fo, certain deduclibles. co.lnsu,ance and/or maximums)
for those subscribe,s who are defined as low income subsc,ibe,s In accordance with Ihe prog,am under
which they a'e enrolled, If the p,ogram prescribes certain deductibles endlo, co.lnsu,ance. e Participating
Provider shall make no additional charge fo, cove,ed services olherthan the applicable deductible endlo,
co.lnsu,ance. provided the low Income subscribe, pays the deductible andlo, co.lnsurance wllhln the time
limit set forth In the Subscription Agreement 0' Maste, Contracl unde, which the subscriber is enrolled.
24, In regard to UCR p,og,ams which do nol Include Income limits. a Participating Provide, shall perlorm cov-
e,ed services wllhout making an additional cha'ge above the fea paid by Blua Shield (except for certain
deductibles. co.lnsu,anca andlo, maximums) fo, all subscribers who are enrolled unde, such prog,ams. If
the p,og,am p,escribes certain deductibles andlo, co,insurance, a Participating P,ovlde, shall make no
additional cha'ge fo, covered services othe, Ihan Iha applicable deductibles andlo, ~o.insu'ance. provided
Ihe subsc,iber pays the deduclible andlo, co. insurance wilhin Iha time limit set forth in Ihe Subscription
Agreemenl 0' Maste, Cont,act unde, which the subscribe, is enrolled,
25, Partlclpaling P,oviders shall make Ihe Initial determination as 10 whelhe, a subsc,ibe' is of "low Income" 0'
"ova,.lncome: It shall be tha subsc,ibe,'s responsibility to lurnlsh proof of incoma 10 the Participating Pro-
vider wllhin 90 days of a request. In the event 01 any dispula concerning the income status of a subscribe"
Ihe final dete,mination shall be made by Blue Shield, Annual income shall mean lotallncome I,om all sources
of Ihe applicant'subsc,ibe, and eligible dependents, In delermining eligibility for payment in full. tha Partici.
pating P,ovlde, will not take Inlo accounlthe lolal assels 01 the applicant.subscribe" hospital accommoda-
lions, 0' other non.income facto's,
26, A Particlpaling P,ovide, may not ,oulinely charge Blue Shield subsc,ibe,s more than he cha'ges patients
not covered by thlrd.party payment plans, When ,equested. a Participaling Provider must substantiate his
usual charges to Blue Shield, tI a ,evlew 01 a provide,'s ,eco,ds indicales any usual charge of ,eco,d Is not
valid, Blue Shield may use this additional information in its determinalion ,of a usual charge. A Participating
P,ovlde, who p,ovides services unde, a bona fide conl,actual arrangement, such es health maintenance
organizations aUlho,ized to ope,ale under the Health Mainlenance Organization Act, Act. No, 234 of 1980,
may ente, Into agreements with such plans to charge Ihei, membe,s diHerently than he routinely cha'ges
Blue Shield Subsc,ibers. Addillonally, a Participating Docto, may cha'ge a discounted fee to benefil a finan-
cially disadvantaged patient, provided the reason for such charge is appropriately noled In his reco,ds.
27, Predetermination, the p,e.t,eatment ,evlew by Blue Shield of a Ireatment plan 10 delermine the eligibility of
the subscribe" Ihe subscriber's coverage fo, services unde, his ag,eemanl and the Blue Shield allowance
fo, such services, is a conl,actual obligation unde, Ihe terms of certain Blue Shield p,og,ams, P,edele,mi-
nalion must be requested prior to the initiation 01 any Ireatment plan in accordance with the subscribe,'s
cont,acl with Blue Shield, It shall be the subsc,iber's responsibility to Inlorm the Participating Provide, of
hlslhei contractual 'equl,ements fo, predete'mlnation, Approp~ate diagnostic aids, such as, but not limited
to, rediographs, must be submilled with a Request 10' P,edele,mination as ,equired by Blue Shield In
accordance wilh accepted standards of praclice, Charges fo, services 'ejected because the Participaling
P,ovlde, failed 10 Initiate p,edele,minallon shall not be collected I,om the subscribe"
-4-
11I.14
APPENDIX A
By-LAws OF PENNSYLVANIA BLUE SIIIEW
EXCEIII'l' REVISED AplUL 11,1990
ARTICLE X DISPlrrES AND COtmlOVElISlES INVOLVING DOCTOIIS
Secllon I. Review CommUtees. All maners, dispules 0' controversies arising out oflhe relationship between the
Corporatiun and professional p,oviders who rende, health services to Ihe Corporalion's subseribera.
Including any questions involving professlonalelhies, shall be eonside,ed, aeled upon, disposed of and
delennined by Ihe appropriale one of the Iwo Review Comminees hereinane, refem:d 10,
Seellon 2. Medical Review CommUtee. The,e shall be a Medical Review Comminee consisting ofatleast five (5)
members, each of whom shall be appoinled by the Chainnan oflite Boa,d ofOi,eelors of the
Corporation and each of whom shall serve until his suc.esso, Is appointed. A majority of the members
of the Medical Review Comminee shall be doclors who are eithe, members of the Boa,d of Directors of
Ihe Corporalion 0' members of the Corporation,
Seellon 3. Dental Review CommUlee. There shall be a Dental Review Comminee consisting of alleasl five (5)
members, each of whom shall be appointed by Ihe Chainnan of the Boa,d ofOire.tors oflhe
Corporation and each of whom shall serve until his successo, is appointed, A majority of the members
of the Dental Review Comminee shall be doctors of denial su'gery who a,e eithe, members oflhe Board
of Directors of the Corporation 0' members of the Corporation,
Seellon 4. Omeers of Review Commlllttl. The Chainnan oflhe Boa,d of Direelors of the Corporalion shall
designOle one of the members of ea.h Review Comminee as Chainnan the,..f. He shall also designale
a Se.,etary fo, ea.h Comminee who shall nol be a memb., of the Comminee bul shall be an employee
of the Corporation,
Seellon S. Review CommUteellleeUngs - Quorum -Informal Aellon. Each Review Commineeshall meet at the
call oflhe Chainn.n of the Comminee at such date, lime and place as he may sl"cify, Meetings of each
Review Comminee may also be .alled fo, any .pprop,i.te d.te. time .nd pl.ee by any th,ee (3)
members oflhe Commiltcc involved. The date. time and place of each meeting of a Review Comminee
sh.1I be sel fOrlh in a wrinen notiee which sh.1I be senllo each membe,oflhe Commillee a ,easonable
lime in advance oflhe dale of the meeling.
A majority oflhe members of the Review Comminee sh.1I eonstllute a quorum fo, Ihetrans.elion of
business and the acts ofa majority Dflhe member present al a mcctin~ al which a quorum is present
shall be Ihe aels oflhe Review Comminee, If the members ofa Review Comminee shall severally 0'
collectively consent unanimously in writing to any action proposed to be taken by the Committee, such
action shall be as v.lid an action as though it h.d been l.ken by the Comminee al . duly convened
meeting.
Seellon 6. Submission of lIIallers 10 lhe lIevlew Commlllee. Mailers m.y be submined to a Review Commillee
by anyone nfthe following:
(a) Any membe, of the Corporal ion 0' of the Iloard ofOireetors oflhe Corporation;
(b) The Ch.imlan of the Ilo.,d ofOireetors oflhe Corporation;
(c) The Subscribe, Advisory Couneil of the Corporalion:
PIl,26
I .
(d) The Presidenl oflhe Corporalion;
(c) The Setrelary 0' any membe, ofa Revi.w Commillee;
(f) Any Panicipating Doclor.
All mailers 10 be submilled 10 a Review Commillcc shall be set fonh in wriling and delivered to the
Secrelary oflhe Review Commillcc involved,
Seellon 7. General Proceeding. Oefor. a Review Commlllee. The SeereIDry of each Review ~ommillee shall
prepare an agenda of Ihe mallets 10 be considered al each Commillcc meeting, lie shall also detennine
inilially whether any panicular mailer /TllIY alTeetlhe stalus ofa doctor as a Participating Doctor of the
Corporation beeause of conduct incompatible wilh his sIDlus as a Panicipating DOCIO' of the
Corporation, including bul nOllimiled to:
(a) Violalion of his Panieipating DOClo,'s Agreemenl;
(b) Violalion oflhe regulalory legislalion applicable to Ihe Corporation;
(c) Violation ofthc Regulations fo, Panicipating Doclots of the Corporalion;
(d) Refusal to adhere 10 the service benefil concepl oflhe Corporalion;
(c) Violalion of red era I or SIDle criminalslDtues,
Jflhe SecreIDry delennine, Ihat a mailer may involve such conduel. he shall request legal counsel of the
Corporation 10 prepare an app'opriale Complainlselling fonh Ihe mailer involved, which Complaint
shall be submilled 10 Ihe Commillcc along wilh the mailer involved.
In considering any mailer b,oughl before it as aforesaid, a Review Commillee shall have authority to
IDk. anyone or more oflhe following "lions, which may be in li.u of or in addition 10 any funher
proceedings in any mattcr involving a Complaint:
(a) Rerer Ihe case fo, ,eeommendalion 0' atlion by any app,opriate eommillcc. board 0' division or
the State P,oressional Society 0' Local P,orcssional Society orthe dOClor involved;
(b) Rere, Ihe mailer 10 an app,oprialelaw enrorcement omeer 0' .gency orthe red.ral, SIDte orany
Local Govemmenl irlhe Commillce has p,obable cause 10 believelhat Ihe doclO' involved
secured paymenl from Ihe Corporalion fo, services perfonned by Ihe doclo' for a subseriber on the
basis of malerial false infonnation submilled 10 Ihe Corporation wilh the intenlion of defrauding il;
(c) Rerer Ihe mall., to Ihe State P,oressional Licensure Ooa,d oflhe docto, involved;
(d) Request Ihc dOCIO' involved 10 make an app'opriale refund;
(c) Withhold fUlu" payments due from Ih. Corporation 10 Ihe doeto, involved.
A Review Committee may request a doctor to appear before it in connection with any matter being
considered by it and either Review Comminec may refer matters 10 the other Review Committee for
appropriate action.
Secllon 8. Proceedings Involving Slalus or a Doctor as a Participating Doctor. If a Revi.w Commillee
d'lennines Ihat a hcaring should be held wilh respect to any mailer which has been staled in a
Complaint.lhe Chainnan shall promplly fix a tim.. dale and place fo, such hearing. Th. Panicipating
DoClo' involved shall be given atleall fin..n (I S) days w,ill.n nOlice by the Secrc13ry of the Commillee
PO.27
ApptndiK B
PENNSYLVANIA BLUE SHIELD
Rovlew Committee Quldellnoa
Pennsylvania 8rua Shiold ope,ales unde, the provision. 0' Act 271 of 1972 (40 PA. C,S. Secllon 6301 et
aaq,). Section 6324 (c) of Ihe Acl requ~es thaI all metIers, disputes 0' controvarsios rwaling to profosslonal
health seNlce doctors or any queslions InvoMng pralesslanol elhics shall ba considarod and dalolffilned only by
haalth salVlco dOClor' ,gtgclgd In a manngr p,gscnbod In lho By.laws of lho profoJllionol heolth ..rvice cDrpD'.'
lion Involvad,
Tho Blua Shield By.laws (Mlde Xl stlpulale Ihal Review Commttees be ''''mad 10 consider and dalerrrlne
matte's, di.pules a' conl'averslas aris,"g aut 0' tho 'alaliansrilp bOlwoon Bluo 5hlola and profosslonal providers
who randor heollh sorvices,
Tho Modlcal Review Comrrillaa COnsida,s aU mattals, disputas or conlrovorsles Involving on p,olosslonal
provide,s who rende, heallh saNiCas, Tho Donlal Review Commlttaa considers mailers. dISputes or conlrova,.
sics Involving denlisls, -
Tho mailers ,efarred 10 tho Reviow Committees generahy concern dispul.s willi Illspeclto ovarutilizal;on
and/or rrisutillzallOn 01 services, Dually of care, service benelils and usual charge p,obklms.
"
The fallaWlng p,ocedu.es alo opplicable to Review Committees:
1. Fa, mallars Involving polenhal averutillZation andla' misuhlizalion 01 sarvicas a, Inappraprlata Quallly 01
care. a complale re"ew is canducled of Ihe providar's practico pallom prior 10 ralerralla a Roview
Committee, During IhlS review. a sampla 01 pallllnl ,acords, stalistics. diagnostic aids. and/O' olhcr
Informational sourcas is reviawad. The resulls of such review. es well as the complete melhodology
usad, will be maaa avallabla 10 tM providar When any adva,se findings resull. Shoula the providcr
disagree wilh the ,esulls 01 Iho rOVlew due to Ihe sample siza, ha may raquasl an axpandod review.
2. I' It Is dalarminad Ihal an overpaymenl hos bean maaa, 1M amount 01 Iha ova,paymenl wi" ba calcu.
lated for a periOd oltlma nolla exceed Ihat permilled by tho SIalute of Umrlatlons, Tho results 01 such
ove,payment calculations Wll bc made available 10 tha provide" The p,ovider wtll ba lumlshed with Iha
malhodolagy usod 10 calculale Iho overpaymant, including any variables usad to adjust mulli.year ovar.
payrnenl detarminations,
3. II it is dlscova,ad In Iha 'ovlew process that an underpaymant has occurred. Iha provider may seek
reimbursement, through Ihe app'oprlale appeal mechanisms. la, all cleims involved during Iha sarna
lime pOllod as the review by Blue Shield. Such dallllS lTl(Jst ba supported by chnlcal records.
4, II Iha maltor Will nol be ratarrad fo, proseculion, and daas nol pa'lain 10 a haarlng to consider whether
a provide' should be suspended or terminated as a Partlcipoting Provide" a Blue Shield reprasanlative
will conlacllhe provide' to discuss an findings, 1I1he provide' elecls nollo meel with a reprasentativa
or It a meeting cannal be arranged within a reasonable pe,lod 01 lime, the info,malion wil be transmit.
tad 10 the provide' by mail. At that lime. Ihe provide' I. advised ot all findings of on adverse 0' problom.
allc nalure and 01 tne eppeal mechanisms avaUable 10 him. The p,avlde, is p,ovided Wlth a daleiled,
wtllten slatement outlining the basis 01 any 'efund reoueSI, Tho p,ovide, Is also advisad 01 the repay.
menl options avaiiable to him. and is provided wtth a copy of the Review Committae Guidelines. Tho
provider will be encouraged 10 submit any aadllionailnfarmallon which could have a bearing on tho
malta' and/or croala Iha baSIS 10' a seltlamanl a, aajuslment to Iha ralund amountl1lQuesled, il any.
5. Should lurthe, communications lell to ,esult In an agraamenl as to tho provldar's ,afunding an overpay.
ment, ~ any. or other matters pertaining 10 the review, lha pravidar will ,ocaive written notllicalian al
leosllhirty (301 calonda' days In advance allho dalo ollha Review Cammiltae meellng at which his
cose will be considered, 01 his light 10 appear boforo Iha Committee and 01 his .ightto ba represanlad
-1-
11I19
by logal counsol. Tho p'ovlda' I, again encouragod to provldo any Informnllon which may ba portlnont
to the resolullon of lho malle" Accompanying Iho lalla, Is anOlhe' copy 01 tho basis of any ,olund
rcqUDGt, tho epplicablo saction!s) of Iho Bluo Shield By.laws portaining to Review Cornmlllees, lhe
Rovlow Commlllao GuidetineS and, If eppticeDle, Ihe Pal1iCioaling Providor's Agraamonl ond Iho Rogu.
lations (0' Participating Provldors,
6, Atloost filloon lIS) colendar deys prior 10 Iha delo ollhe Reviow Cornmllleo moollng at which hIS coso
Will be considerod, Ihe p'o"'da, will ba given a copy of Iha documenlallon to bo prosontod to Iho
Reviaw Convnilloo.
7. A provider may forwa,d Information to Ihe RDVlew Commlllee or, upon wrillen ,equestlo the Secrelery
oltha Commilleo. 1011'/ appea, boloro tho Commllleo, A providor who request' to eppea, before tho
Commilloo will bo notified of tho dala and lime 01 his appearanco alleeSl filleon (15) colendar days
prior 10 tho meotlng, Such nOliticelion will Inform lhe provider of 'he oxacl nolura of tho procooding, 01
hi, righllo ,epre,ent his disogreoment and 10 provido eny othor Information which will aid tho Cornmil.
leo In 11' deliDe/ellon of the meller.
B. Mailers scheduled to be brought befero the Review Commillea will not bo deliDe'ated on a lo,mal or an
Informel Desls between Blue Shield Stall end Cornmilleo membars prio' 10 lho schoduled dato ollho
Commllleo moeling oxcopt atlho reQUDsl of the provider. Should Iho provide, mako such a roquesl, _
tho ,esulls will bo rullY disc1OSQ(lto him In writing,
g. A Review Commilloo's con,ldaralion 01 any matter, dispute or controversy concarning a provide' who
ha. ,.quesled 10 appear WIn De conlinued unlll atte, the scheduled appeerance of the provider o<cepl
as lollows: "
a. If the provide, Is notified or the Committoe meoting 45 0' more calOndar day' In advanco 01 such
mooting and advises Ihe Secrelary oflhe Committee thai ha wI,hes 10 ettend bulls unable 10
be presenl on 1M spOCIllC dale scheduled. the Commitleo will procoed wllh Its consida,ation of
the melle" Howover, Ihe pro>1der ""II be given Ihe opportunity to appea' boforalhe Commllleo
allts noX! scheduled meeting,
b. II noliricatlon IS sent loss tllan 45 calenda' days p~or to the Committeo mealing and Iho p,ovlde,
adVises Ihe Secrelary 01 the Commillee thai ho wishos to ellend Ihe meetifl!J. but Is unohlo to
do so on the spocific dalo scheduled, he will bo granted one continuance, n,e Commlllee wOl
proooed wllh its conslde,ation of the mailer atlho next acheduled meellOg if the provider. fol-
lowing nollficollon as provided ror in 110m 5 ebove. lalls 10 oppea,.
10. Following tho Review Convnilloe meeting, Ihe p,ovlde, will Do advlsod In wTlting within Ihll1y (30) calen.
da, days 01 all doterminations mado by Iha Commlllee. Such nolilication will Include. bul not bo luniled
10, tho emount of eny ,olund at issue, Ihe facts and rallSonlng supporting Blue Shield'a conclusions,
and, 10' Participating Providers, the specific basis In Regulallon of Blue Shield's claim, For those mat.
ters involving tne partiCipating status of a provide" the provider will DO nollned wilhin thirty (30) calender
days fonowlng a dalSrminallon by Iho SecrelalY or Health.
,,. Any overpayment amounls which havo not bean returned 10 BltJo Shield within thirty (30) calendo, days
01 notification of tho Revlow Commllloe's determination will bo subjoct to withholding 01 paymonls due
tho Participaling Provida, and the assassmBnt of Interesl, Intere,t will also be assessed on instanmont
payment arrangemenls which exceed gO days, Tho rate of intere.1 is besed upon the gO Day TrnasUty
Bill ,ale In ellect atlho beginning of Ihe colenda, Quartor during whlclla Review Convnitlee decision 0'
on InslaUmont rapayment agreement Is 'Bached,
12. If tho Review Commltlee delermines thai . hea~ng should be hold to consider whother a provldo'
should Do suspended or tenninated as a Penlclpaling PrOVider. Iho proceedings will be conducled as
sel lorth in Article X, Seclion e, 01 the Bluo snield By.laws, and in tile "",nne, described in theso
guidolines,
-2-
11I,20
_.~...~,..._.,._..,,,,,.-'_~r,~.~..~~:__~.~:,;f:.{i~;.-."'.""'~'h.~;':(_-:'''J'.'''''':''''''''''~''''~;.~A<~.'-.._
@ IlJ.:>~:>W "... ..WlIoU.. 1w'lI.'.tnl'~"
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.... .--
PENNSYLVANIA BLUE SHIELD RADIOGRAPHY QUESTIONNAIllE
115611
LESLTE W WENRrCH DC
424 W GRAND AVE
TOWER CI TV PA 17980 -/u'l
If any information on the above label is incorrect, please
provide correct information.
SECTION A: PRACTICE INFORMATION
1.
Are x-rays which are submitted to Blue Shield under
this provider number taken in this office? , Yes .,...--
No
a.
If no, please provide the complete name(s) and
address(es) of the provider(s)/facility(ies) who
actually takes the x-rays. Sign the questionnaire
on page 5 and return to Pennsylvania Blue Shield
in the enclosed envelope.
If yes, does this practice have other non-hospital
sites where x-rays are taken? Yes No ~
(If yes, this entire questionnaire. should include
information for all sites for which x-rays are
submitted under this provider number~)
2. Please list the full name of all persons who take
x-rays with this equipment (other than doctor).
b.
~
-
4. How many x-ray machines do you have? /
5. How many processors do you have? /
Please fill out sections B and C for each piece of
equipment noted in questions 4 and 5 above.
\
.'
Page 4
, ., . .... SECTION D:
REPORTS
QU~LITY CONTROL PROCEDURES AND INSPECTION
3~
/8
0-8
,8
1.
2.
3.
4.
Is periodic qualitY,control.regularl)' performed;. J..
Yes V No_ G PS-er-v'i Tit>- cP",n.{, I-7
Who is the individual responsible for the technical
evaluation of the quality control?
Name: fQ..... tM~.....",; .II
Title: ~'~~ -^-' .
Who performs quality control testing of the x-ray
equipment? ~
Consulting physicist Physician~echnologist
Other - - -
k'{
Who performs quality control of the Jilm processor?
Consulting physicist Physician~Technologist
Other - - -
5.
Who monitors viewbox and darkroom copditions?
consulting physicist Physician ~Technologist
Other - - -
6,
Are written policies and procedures for the quality
assurance program available? Yes____(Please send a
~50PY')
Is a record kept of unusable x-rc:;rc f~and repeat
films? Yes____ (please send copy) 0
. ,
When was this office/facility last inspected by the
Pennsylvania Department of Environmental Resources,
Bureau of Radiation Protection? 19_ ~
(Please provide a copy of the last inspection~eport.)
7.
8.
;::
9.
Please attach a copy of last month's report of
personnel radiation badge readings. Information which
identifies the personnel involved may be eliminated.
~ , /
r 1--/4-:- iJ, t<; df'-e'J r...... 'Lr, 'h~
'kl"- ~ I, 11- I, e--!..-
t{) ~ ,$
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@
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Pennsylvania
BlueShield
C.mp Ilill. P,nnsylv>ni. 17089
M~lk......N.,.,.c-...,..,..... ~"'*-"
April 24, 1995
Leslie W. Wenrich, D.C.
424 W. Grande Avenue
Tower City, PA 17980
Dear Dr. Wenrich:
As you are aware, Pennsylvania Blue Shield has been conducting a
review of the technical quality of x-rays. You had completed a
survey and forwarded to us for review. Based on our review, it
\~a.s determined that we needed to review actual x-ray films and
interpretations in order to determine whether the technical
quality of your x-rays was acceptable. We have contacted you
twice and requested that you forward films and written
interpretations for the patients on the attached listing.
However, you have not complied with that request. Therefore, we
are again requesting that you provide these films within thirty
(30) days of the date of this letter.
As a Participating Doctor with Pennsylvania Blue Shield, you have
agreed to abide by the Regulations for Participating Doctors.
Regulation B-15 states that:
Each Participating Provider shall permit Blue Shield
representatives to make reasonable examination of his
clinical records, including x-rays, relating to -any
covered service performed for Blue Shield subscribers,
when such examination is necessary to resolve any
question concerning such services.
In order to determine whether we can continue to ;;l1ake payments
for x-rays performed in your office, we must review the requested
x-rays. If you fail to provide the requested films, ~e will have
no choice but to assume 1:hat your x-rays do not_mee1: acceptable
standards and payme01: for rU1:ure x-rays will be denied.
We would appreciate your prompt attention to this mat1:er.
have any questions or wish to discuss this matter further,
con1:aC1: me at (7171) 763-3207.
If you
please
Sincerely,
.--. C' i:
. . , \
C-.: i'k..L...- ,-, ':LlC;-...:.. ';':;;-
Em 1, , I
e ~e A. Scon~ng, Mana9ir
Benefits Utilization Management
".
EIIS/lao
Enclosure
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Leslie \'I. Henrich" D.C.
424 W. Grande Avenue
Tower City, PA 17980
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The Law Offices of SPERO T. LAPPAS
205 State Street
Post Office Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
By: SPERO T. LAPPAS, Esquire
Pa. Supreme Court identification no. 25745
ATTORNEY FOR THE PLAINTIFF
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D.C. : CIVIL ACTION - LAW
plaintiff :
: No. 97-2288
v. :
: JURY TRIAL DEMANDED
HIGHMARK, INC., d/b/a :
PENNSYLVANIA BLUE SHIELD, :
Defendant :
PETITION TO VACATE, SET ASIDE, MODIFY AND REVERSE
DECISION BY THE
HIGHMARK MEDICAL REVIEW COMMITTEE
RESPECTFULLY SUBMITTED,
s of SPERO T. LAPPAS
By:
o T. LAPPAS, Esquire
Supreme Ct. ID no. 25745
205 State Street
P.O. Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
ATTORNEYS FOR THE PLAINTIFF
The Law Offices of SPERO T. LAPPAS
Page 1
, .
PETITION TO VACATE, SET ASIDE, MODIFY AND REVERSE
DECISION BY THE
HIGHMARK MEDICAL REVIEW COMMITTEE
AND NOW, comes the plaintiff, by and through his attorneys,
The Law Offices of SPERO T. LAPPAS, and makes this PETITION TO
VACATE, SET ASIDE, MODIFY AND REVERSE THE DECISION BY THE HIGHMARK
MEDICAL REVIEW COMMITTEE respectfully representing as follows:
1. Plaintiff LESLIE WENRICH, D.C., is an adult individual who
has been at all times relevant to this cause of action a Doctor of
Chiropractic, duly authorized to practice that profession and
licensed by the Commonwealth of pennsylvania.
2. Defendant HIGHMARK CORPORATION (hereinafter II Highmark" ) is
a corporation doing business and operating in and under the laws of
the Commonwealth of Pennsylvania with a place of business at 1800
Center Street, Camp Hill, Pa., Cumberland county, Pennsylvania.
3. Highmark is in the business of providing health and
medical insurance benefits to customer subscribers. Pursuant to
this business, Highmark receives and pays qualifying medical and
doctor bills for its subscribers.
4. At all times material to this cause of action and for all
acts, conduct and omissions described in this Complaint or
otherwise material and relevant to the cause of action stated
herein, the Defendant acted through agents and servants (some of
whom are named in this Complaint and some of which are not named in
this Complaint) for whose acts, conduct and omissions the Defendant
is responsible and liable,
The Law Offices of SPERO T. LAPPAS
Page 2
5. All such agents and servants of the Defendant acted within
the course and scope of their employment with respect to all acts,
conduct and omissions described or referred to in this Complaint or
otherwise relevant to this cause of action.
6. At various and diverse dates within the statute of
limitations, Dr. wenrich sent bills to Highmark for payment in
accordance with the Highmark subscriber agreements which covered
certain of Dr. Wenrich's patients.
7. After Dr. Wenrich submitted these bills, Highmark sent
notices by mail to several of the covered patients telling them
that the bills were disapproved for payment.
S. As part of the message by which these patients were
notified that their bills were disapproved for payment, Highmark
told the patients that Pennsylvania Blue Shield had "determined"
that Dr. Wenrich's equipment was substandard. This "determination"
was cited as the reason, or one of the reasons, that the bill was
being disapproved for payment. A specimen notice is attached
hereto as Exhibit 1.
9. In fact, Highmark had made no such determination at all.
In a letter dated May 9, 1996 and signed by Emelie Sconing,
Highmark admits that it was simply assuming that Dr. Wenrich 's
equipment did not meet the appropriate standards. A true copy of
this letter is attached hereto as Exhibit 2.
10. There was never any "determination" as pennsylvania Blue
Shield falsely reported to the Plaintiff's patients.
The Law Offices of SPERO T, LAPPAS
Page 3
11. The assumption of Highmark that Dr. Wenrich's equipment
was substandard was based upon Highmark's feeling that Dr. Wenrich
had allegedly failed to reply timely to Highmark's requests for
certain information about Dr. Wenrich's office equipment.
12. In fact, Highmark had never made any determination that
Dr. Wenrich's equipment was substandard.
13. In fact, Dr. Wenrich's equipment was not substandard.
14. To the best of the Plaintiff's information as of the
filing of this complaint at least six patients, and maybe more,
received these false and defamatory communications from the
defendant. The Defendant has supplied a list of patients who
received the offending Notice. This list is attached hereto as
Exhibit 3.
15. All of the defendant's statements of or about the
Plaintiff as described above are and were false and defamatory to
the Plaintiff. They tend to blacken the plaintiff's reputation or
expose him to public hatred, contempt, or ridicule, or to injure
him in her business or profession.
16. All of these statements and remarks expressed and
communicated their defamatory meaning about the Plaintiff either
directly and overtly or by reasonable implication, insinuation, and
innuendo.
17. Bach of the above-described statements and remarks when
heard or read in its totality and context is and was defamatory of
the Plaintiff.
The Law Offices of SPERO T. LAPPAS
page 4
18. Furthermore, each statement and remark is and was
defamatory int~lia in that the defendants thereby described the
Plaintiff as doctor who uses or has used substandard equipment to
treat his patients or to make diagnoses.
19. All of these statements and remarks and the defamatory
content thereof applied to the Plaintiff either overtly or by
reasonable implication.
20. All of these statements and remarks were published to
persons who understood them to refer to the Plaintiff, and who
understood them as intended to be applied to the Plaintiff.
12. The defamatory content of these statements is false and
untrue.
21. The Defendant in connection with the making and
publishing of these statements and remarks were reckless, or in the
alternative, they were negligent.
22. None of these publications, statements or remarks was
privileged; in the alternative, any privilege which would have
otherwise attached to the Defendants and their publication of these
statements and remarks did not attach by virtue of actual malice
and/or abuse, recklessness, reckless disregard of the falsity of
the publication, or negligence. or otherwise.
23. As the direct, legal, and proximate result of the
Defendant's actions as described in this Complaint, the Plaintiff
has suffered actual harm in that, inte~alia,
a. he has suffered the impairment of reputation and
The Law Offices of SPERO T. LAPPAS
page 5
standing in the community;
b. he has been libeled, slandered, and defamed in
connection with his competence to carry on his
business or profession;
c. he has suffered great and extreme personal
humiliation, mortification, embarrassment, mental
anguish and suffering;
d. he has been exposed to public contempt and
ridicule;
e. he has been injured in her business or profession.
24. In 1997, Plaintiff initiated a lawsuit in the Court of
Common pleas of CUmberland County entitled Wenrich v. pennsylvania
Blue Shield (No. 97-2288 CIVIL) bringing the same claim as is
described above. That Complaint is attached as Exhibit 4 hereto
and incorporated into this Complaint by reference.
25. Highmark challenged the propriety of that lawsuit by
filing preliminary objections arguing that the plaintiff was
required to bring his claim before the Highmark medical Review
Committee (hereinafter "HMRC") in the first instance.
26. The Court agreed and dismissed the plaintiff's Complaint
for failure to submit the case to a mandatory alternative dispute
resolution mechanism, in violation of Pa.R.C.P 1028(6). This Order
and opinion are attached hereto and marked collectively as Exhibit
5.
27. The plaintiff did submit his claim to the HMRC.
The Law Offices of SPERO T. LAPPAS
Page 6
28. Thereafter, the Plaintiff complained to the HMRC and
Highmark about the unfairness of the procedures established for the
Plaintiff's hearing.
29. HMRC's counsel, Attorney Thomas wood, wrote to
plaintiff's counsel, assuring the Plaintiff (among other things)
that defendant Highmark and the HMRC had cured the defects in the
composition of the medical review committee which had led the
Pennsylvania Supreme Court in R~dolgh_~enn~nia Blue Shielq,
Pa. ---, 717 A.2d 508 (1998) to hold that the Committee and
its decisions were unconstitutional. (See Exhibit 6.)
30. Specifically, counsel for the committee assured the
Plaintiff that "the objections raised by the Supreme Court have
subsequently been addressed and we believe the composition of the
Committee now meets the standards suggested by the Supreme Court".
31. The "objections" raised by the Supreme Court dealt with
the fact that as long as the HMRC was composed of members of the
Highmark Corporation or members of its board of directors, then the
committee was ipso facto unfair and partial.
32. In fact, the assurances of Attorney Wood's March 30
letter were not accurate and at least three members of the current
HMRC are members of the Highmark corporation: specifically, w.
Scott Nettrour, Robert Albertini (who was Chairman of the Medical
Review Committee) and William Daiber.
33. The defendant was well aware of this composition. In
fact Highmark has known that members of the HMRC were members of
The Law Offices of SPERO T. LAPPAS
page 7
.
the corporation and it was Highmark I s intention to allow that
situation to persist in spite of RQdolpb. Neither the defendant
nor any members of the HMRC disclosed to Plaintiff before the
hearing that some HMRC members were members of the corporation.
34. The Plaintiff and his Counsel appeared for an alleged
hearing before the HMRC on or about May 4, 1999 and thereafter the
HMRC issued its "decision" dated June 1, 1999 dismissing
Plaintiff's claims.
35. The HMRC's June 1 "decision" did not properly address an~'
of the issues raised by Plaintiff's claim. (Exhibit 7.)
36. Furthermore, the proceedings, procedure, decision and
adjudication of the HMRC were defective in inter alia the following
ways, and these defects, individually and in combination with one
another, render the HMRC decision unjust, inequitable and
unconscionable, and require that this court vacate, set aside,
modify, and reverse the decision of the HMRC and allow this case to
proceed to trial by jury in the Court of Common Pleas.
a. The Plaintiff was not allowed to call witnesses and
his request that Highmark employees appear to offer
evidence in his favor was denied.
b. The Plaintiff was afforded no opportunity to
present evidence, other than his own statements and
the presentation of his counsel.
c. The Plaintiff was afforded no opportunity to
challenge through witnesses or cross-examination
The Law Offices of SPERO T. LAPPAS
Page 8
the evidence presented by the defendant.
d. The HMRC was constituted in such a way as to be
unfair, partial, biased and predisposed in favor of
Highmark and against the Plaintiff in that some of
the members of the HMRC were members of the
Highmark Corporation.
e. In fact Article X, section 2 of the Defendant's
bylaws requires that "a majority of the members of
the medical review committee shall be providers who
are members of the corporation. II (The portion of
the defendant's bylaws dealing with the HMRC are
attached hereto as Exhibit 8.)
f. The defendant's bylaws (Article Xl do not empower
the HMRC to make an enforceable monetary award to
the Plaintiff, and therefore the HMRC did not have
authority to address Plaintiff's claim.
g. The HMRC which heard the Plaintiff I s case was
constituted in such a fashion as to be unfair to
Plaintiff in that it had no Doctors of
Chiropractic.
h. Plaintiff believes and therefore avers that the
members of the HMRC are paid in some fashion by, or
receive some other advantage or emolument from, the
defendant Highmark Corporation, This does or may
prejudice the HMRC members in favor of Highmark.
The Law Offices of SPERO T. LAPPAS
Page 9
i. Plaintiff believes and therefore avers that the
members of the HMRC are health care providers who
rely on Highmark for reimbursement and payment of
the bills which they (the HMRC members) submit to
Highmark. Accordingly, Highmark has the economic
and practical power to cause the HMRC members
considerable inconvenience and loss in the event
that Highmark becomes disenchanted with the HMRC
members. This does or may prejudice the HMRC
members in favor of Highmark.
j. The dispute resolution mechanism imposed upon the
Plaintiff by the Defendant runs afoul of due
process of law, in that inter alia it did not
provide the Plaintiff with the opportunity to be
heard and to present his claim in a meaningfully
orderly proceeding before an impartial tribunal.
k. Plaintiff believes and therefore avers that the
members of the HMRC are selected by the Defendant
with no input or right of selection by the
Plaintiff.
1. The HMRC decision is the result of fraud with
respect to the Defendant's non-compliance with the
Rudolph decision.
m. The HMRC members were incompetent to decide the
issues of defamation raised by the Plaintiff's
The Law Offices of SPERO T. LAPPAS
Page 10
claim. Indeed, the HMRC process is not designed or
intended to decide cases of this sort.
n. The decision of the HMRC is against and contrary to
the evidence.
o. The decision of the HMRC is against and contrary to
the weight of the evidence.
p. The decision of the HMRC is against and contrary to
the applicable law.
q. The HMRC decision mistakenly and unlawfully
considers the Plaintiff's alleged breach of his
contractual obligations to Highmark to be a defense
to the defendant's defamation of the Plaintiff. In
fact, contract breach is not a defense to
defamation.
r. The HMRC decision mistakenly and unlawfully
considers sections B-9 and B-1S of the ~
Regulations for Participating Providers to be
relevant to the Plaintiff's claim. In fact,
neither one of those sections has any relevance to
this case whatsoever.
s. The HMRC decision mistakenly and unlawfully held
that "Blue Shield acted properly and within its
rights when it denied the claims submitted by Dr.
Wenrich and when it promptly notified its members
of the reason for the denial." In fact, the
The Law Offices of SPERO T. LAPPAS
Page II
defendant's complained of actions went far beyond
any lawful notification and constituted defamation
against the Plaintiff.
37. WHEREFORE. the Plaintiff requests that this court enter
judgment in his favor and against this Defendant. Plaintiff also
requests the following relief:
a. That the Court invalidate, reverse, vacate and set
aside the decision of the HMRC ion this case.
b. That the Court enter an Order requiring that the
HMRC be disbanded and that the Defendant be
prohibited from requiring submission of any
disputes to a medical review committee until a
committee is constituted with a composition and
procedures which are legally sufficient and
adequate.
c. That the Court order that this case shall proceed
to trial by jury in the Cumberland County Court of
Common Pleas.
The Law Offices of SPERO T. LAPPAS
page 12
J '"-'
--
Leslie Wenrich, D.C,
#115611
'- Patient's Nam!l AlZreement II ~fScrvic!l
Lawrence Bensinger 180-56-3696 06.08-94
Roxanne Buffington D6276246 01-10-94
Judy Gass 180-38-0693 06-17-94
Barbara A Klinger 184-34-1214 08-01-94
Mary Smeltzer 197-40-8554 10-24-94
Roy E, WiUiard 192-30-4826 10-05-94
'-
EXHIBIT
r ~
"-
-'
insurance benefits to customer subscribers.
3. PBS is in the business of providing health and medical
business, PBS receives and pays qualifying medical and doctor bi lIs
for its Subscribers.
Pursuant to this
4. At all times material to this cause of action and for all
acts, conduct and omissions described in this Complaint or
otherwise material and relevant to the cause of action stated
herein, the Defendant acted through agents and servants (some of
whom are named in this Complaint and some of which are not named in
this Complaint) for whose acts, conduct and omissions the Defendant
is responsible and liable.
5. All such agents and servants of the Defendant acted within
the course and scope of their employment with respect to all acts,
conduct and omissions described or referred to in this Complaint or
otherwise relevant to this cause of action.
6. At various and diverse dates within the statute of
limitations, Dr. Wenrich sent bills to PBS for payment in
of Dr. WenriCh's patients.
accordance with the PBS subscriber agreements which covered certain
7. After Dr. Wenrich submitted these bills, PBS sent notices
by mail to several of the Covered patients telling them that the
bills were disapproved for payment.
8. As part of the message by which these patients were
notified that their bills were disapproved for payment, PBS told
I
the patients that Pennsylvania Blue Shield had "determined" that
The Law Offices of SPERO T. LAPPAS
Page 4
'-
-
Dr. Wenrich's equipment was substandard. This "detennination" was
cited as the reason, or one of the reasons, that the bill was being
disapproved for payment. A specimen notice is attached hereto as
Exhibit 1.
9. In fact, PSS had made no such detenninat ion at all. In a
letter dated May 9, 1996 and signed by Emelie Sconing, PSS admits
that it was simply assuming that Dr. Wenrich's equipment did not
meet the appropriate standards. A true copy of this letter is
attached hereto as Exhibit 2.
10. There was never any "detennination" as Pennsylvania Blue
Shield falsely reported to the Plaintiff's patients.
11. The assumption of PSS that Dr. WenriCh's equipment was
substandard was based upon PSS' S feeling that Dr. Wenrich had
allegedly failed to reply timely to PSS's requests for certain
infonnation about Dr. Wenrich's office equipment.
12. In fact, PSS had never made any detennination that Dr.
WenriCh's equipment was substandard.
13. In fact, Dr. Wenrich's equipment was not substandard.
14. To the best of the Plaintiff's infonnation as of the
filing of this complaint at least six patients, and maybe more,
received these false and defamatory communications from the
defendant. The Defendant has supplied a list of patients who
received the offending Notice, This list is attached hereto as
Exhibit 3.
15. All of the defendant's statements of or about the
The Law Offices of SPERO T. LAPPAS
Pilge 5
'--
-'
Plaintiff as described above are and were false and defamatory to
the Plaintiff. They tend to blacken the Plaintiff's reputation or
-
expose him to public hatred, contempt, or ridicule, or to injure
him in her business or profession.
16. All of these statements and remarks expressed and
communicated their defamatory meaning about the Plaintiff either
directly and overtly or by reasonable implication, insinuation, and
innuendo.
17. Each of the above-described statements and remarks when
heard or read in its totality and context is and was defamatory of
the Plaintiff.
18. Furthermore, each statement and remark is and was
defamatory inter alia in that the defendants thereby described the
Plaintiff as doctor who uses or has used substandard equipment to
treat his patients or to make diagnoses.
19. All of these statements and remarks and the defamatory
content thereof applied to the Plaintiff either overtly or by
reasonable implication.
20. All of these statements and remarks were publiShed to
persons who understood them to refer to the Plaintiff, and who
understood them as intended to be applied to the Plaintiff,
12. The defamatory content of these statements is false and
untrue.
21. The Defendant in connection with the making and
I
publishing of these statements and remarks were reckless, or in the
The Law Offices of SPERO T. LAPPAS
Page 6
'-'
alternative, they were negligent.
22. None of these PUblications, statements or remarks was
privileged; in the alternative, any privilege which would have
otherwise attached to the Defendants and their publication of these
statements and remarks did not attach by virtue of actual malice
and/or abuse, recklessness, reckless disregard of the falsity of
the PUblication, or negligence, or otherwise.
23. As the direct, legal, and proximate result of the
Defendant's actions as described in this Complaint, the Plaintiff
has suffered actual harm in that, inter alia,
a. he has suffered the impairment of reputation and
standing in the community;
b. he has been libeled, slandered, and defamed in
connection with his competence to carryon his
business or profession;
c. he has suffered great and extreme personal
humiliation, mortification, embarrassment, mental
anguish and suffering;
d. he has been exposed to public contempt and
ridicule;
e. he has been injured in her business or profession.
The Law Offices of SPERO T. LAPPAS
Page 7
97-2288 CIVIL TERM
alternative dispute'resoluUon as required under the Regufations for Participating
Providers.' We now find that Plaintiff is required to submit his complaint to the
appropriate alternative dispute resolution process before pursuing a remedy in the
court system.
DISCUSSION
Defendant Is a Pennsylvania non-profit prOfessional health services
corporation which was organized and is currently operating pursuant to the
Pennsylvania Health Services Plan Corporation Act. This Act states that '[a]1I
matters, disputes or controversies relating to the professional health services
rendered by the health service doctors...shall be considered and determined
only by health service doctors as selected in a manner prescribed in the by-laws
of the professional health service corporation." 40 Pa. C.SA Section 6324(c)
(1995).
The By-Laws of the Medical Service Association of Pennsylvania stale thai
"[a]1I mailers, disputes or controversies arising out of the relationship between the
Corporation and the professional health care providers...shall be considered and
I Defendant's second preliminary objection requests that, in the alternative
of sending this complaint to alternative dispute resolution, this Court dismiss
Plaintiff's Complaint for failure to state a claim upon which relief can be granted.
Because of the action this Court is taking today, there is no need to decide
Defendant's alternative request.
2
97-2288 CIVIL TERM
determined by one of two Re,-:iew Committees." Article X, Sec. , (1995).
PBS' Regulations for Patient Providers further explain how these
controversies shall be decidedj The regulations state that "all matters, disputes or
controversies relating to the s~;ices performed by Participating Providers...shall
.
I
be considered, acted upon, disposed of and determined only by providers in a
manner provided by Article X of the By-Laws of Blue Shield. Regulations for
Participating Providers, General Regulations 8(20). The Review Committee
Guidelines go on to say that "matters referred to the Review Committee generally
concern disputes with respect to overUlilization and/or misutilization of services,
quality of care, service benefits and usual charge problems." PBS Review
Committee Guidelines, Appendix B.
In an opinion somewhat similar to the one at bar, this Court was asked to
determine whether a claim broughl against pas for interpretation of a providing
participant agreement between a health services provider and pas was required
to initially go through an alternative dispute resolution process. The Court held that
40 Pa. C.S.A. Section 6324 of the Professional Health Services Plan Corporation
Act "gives pas power to elect an administrative panel to hear and resolve disputes
concerning the professional health services rendered by its participating
physicians." RRS Imagino Assoc v. Medical Service Assn.. 42 D & C 3d 42,43
3
97-2288 CIVIL TEAM
(1985).
Additionally, the Pennsylvania Supreme Court has already recognized that
various statutes now encourage arbitration and alternative dispute resolution Is
favored by the courts. Borouah of Ambridge Water Authority v. COlumbiq, 458 Pa.
549, 328 A,2d 498, 500 (1974).
"Based Upon the above requirements, this Court finds that the Plaintiff Is
required under his agreement with PBS 10 first submit his complaint to alternative
dispute resolution rather than initially filing II with the court system. The
Pennsylvania Health Services Plan Corporation Act Clearly slates thaI PSS has the
right to prescribe the manner used to settle disputes and conlroversies. PSS. in
ils by-laws. has determined that all matters arising out of the relationship between
participating providers and P8S shall be disposed of via one of two Review
Committees. Based upon this reading, any dispute which falls under this
requirement must be determined by the Review Committee before it can be
removed to the court system.
The case at bar meets the requirement of a mailer which arises out of the
relationship between a participating provider and PSS. Wenrich is a participating
provider who is required under the PBS agreement to forward certain information
to the Defendant in order for PSS to delermine the quality of Wenrich's equipment.
4
97-2288 CIVIL TERM
In turn, Wenrich can submit his bills to PBS which then pays or denies the claim
and sends notices to the participating patients whom Wenrich has treated. Were
Wenrich not a participating provider for PSS, Defendant would not have had any .
reason to send the supposedly defamatory letters to any of Wenrich's patients.
Therefore, this case arose from the relationship between Wenrich and PSS.
Furthermore, the PSS guidelines go on to say that the matters referred to
by the Review Committee generally concern disputes with respect to overutilization,
quality of care, service benefits and usual charge problems. Piaintiff alleges that
his c1airn does not fall within the list of disputes. Plaintiff fails to see that this list
is just a generality produced by PBS to show what disputes are commonly dealt
with by the Review Committee. However, there is no limitation placed upon this
list, nor does PBS specifically list any disputes which are not covered under the
Review Committee's jurisdiction.
Plai~tifj chara~terizes his claim as one of defamation in a possible attempt
to avoid alternative dispute resolution. This Court finds that the dispute between
Plaintiff and Defendant is actually one based upon the requirements of Plaintiff as
a PSS provider. Although Piaintiff couches his complaint in terms of defamation,
this Court will not allow mere linguistics to prevent this case from going to
5
fltA'" L Al.Lr.N
N DAVID RAttAL
CHARLES W RUBENDALL II
ROI!IEAr L WHOON
EUGENE t PEPINSK.....JR
ntOJ-4AS [ WOOD
JOHN It ENOS III
CARl' [ 'R[NCtt
DONNA S WELDON
BRADfORD DORRANCE
.,n:"AEY 5 SrOKtS
ROI!IERr A CtlURCtt
5TlPtlEN L GROSE
A scon SH[AREA
WAYNE Jo4 PEOn
OONALD... LEWIS III
IIAIOGtr Jo4 WWfLEl'
BRENDA 5 l YNCtt
SHAWN w WtlS
AllAN oJ R05S1
.JO"'" A rEICUT[L
KEEFER WOOD ALLEN cS. RAHAL,
210 WAl.NUT STREET
P. O. BOX 11963
HARRISBURG. PA 1710B'1963
PHONE 17171 2!5!5'BOOO
F'AX 17171 2!5S.e0!50
LLP ESUDLISUtD IN IB18
or COUNSEL
WIUIAJ04 " WOOD
SAMUEL C llAn"y
WEsr s"OR[ orrlCE
"I~ rALLOWrllLO ROAD
CAMP lULL. PA 11011
1117) tSI2 5800
[IN NO 23.01181:)5
March 30, 1999
WA"tI'f5 OIAreT PIAl.
(717) 255-8040
Spero T. Lappas, Esquire
205 State Street
P.O. Box 808
Harrisburg, PA 17108-0808
Re: Leslie Wenrich, D.C.
Appearance Before the Medical Review Committee
of Pennsylvania Shield.
Dear Spero:
I serve as counsel to the Medical Review Committee of
Pennsylvania Blue Shield. Jon Dubs has asked me to respond to
the procedural issues raised in your letter of March 8, 1999.
We have consistently taken the position that the Medical
Review Committee is not a court of law, and that it would destroy
the "peer review" nature of the Committee's wOl-k if we were to
attempt to model its proceedings on those of a jury trial as you
suggest. We do not believe that the Committee must provide for
cross examination of witnesses, stenographic recording, or any of
the other procedural features that you request in order to
provide a fair hearing. Pennsylvania case law suggests that due
process requires only "notice and the opportunity to be heard and
to defend in an orderly proceeding adapted to the nature of tl~
case." Greenstein v. Commonwealth of Pennsylvania, Department of
Health, 98 Pa. Cmwlth. 445, 512 A.2d 739, 743 (1986). More
specifically, the Superior Court. in RUdolph v. Pennsylvania Blue
Shield, 451 Pa. Super. 300, 679 A.2d 805 (1996) specifically
found that the procedures adopted by the Committee were
constitutionally adequate. (1~e Supreme Court's subsequent
reversal of Rudol~I, 717 A.2d 508 (1998) was based solely on the
composition of the committee, not on its procedural guidelines.
The objections l'aised by the Supreme Co . have subsequently been
EXHIBIT
l G
Appendix A
BY.LAWS OF PENNSYLVANIA BLUE SHIELD
Excerpt
Revised April 19, 1995
ARTICLE X
Disputes and Controversies Involving Providers
: ;"..111111 I. (J",p"l" 1l",,"IIIIIII' AlllllalllJfs, IhSPlllus Of cOlllrllVurSIUS wislll!) olll 01 tho rulationship betwoolI
11111 CIIII"llallllll illlll p",III:;',III1IiIIIIl)allll CilllI provlllurs (Iwroaltur illlllls Anu;lu relurmd 10 as -providers") who
'''1111", IlIlallh SWVICI", III 1111) Clllpor"lilln's sllllsCllllurs, incllldlllg allY qlluslrons illvolving prelassional ethics,
"I Ii III 1111 COlllilllwwl illlll d"I""II11I1,d hy 1110 "pplOpliale (lIlu ollhe 011110 Iwo novlow Cornmilleos eslablishod
III II I", lilli, A,III;I",
:;"<:11111' :'. Mlldll.allh,vIIIW Conullllluu. [IIelU shallbo a Mmhcal nuvlew Conllnillee consisling 01 alleasl
III!l111 (II) IlIurlllu,r,., II,u:h 01 wlllulll,hallllOilppoinlml hy the Cllai,mall 011110 Board 01 Diroclors of Ihe Corporalion
,1111111,11.11 III Whlllll ,,11,,11 :;UfV() Imlrl II", or IIIJf SIU:COSSor is appointed. A majority ollhe members of Ihe Medical
I h'VIIIW COllllllllhw "IIalll)() IuovlIl",,; wllo aH! nlulllburs 011110 Corporalion, and tile balance 01 the members
,,110111 1111 1l1","IUII" 011110 Corporalioll who iIIe suhscribers 10 health caro conlracts entered into wilh Iho
(:cIIIIOIU11011
1;w:llorl:1. Ilolllallluviuw (;llllllllllloe. lhure shall be a Dental Ruvluw Comrnillee Consislrng 01 at least
III!IIII (II) rn"mlwrs, "aell 01 whom "IIall hu appointed hy the Chairmall 01 the Board 01 Directors 01 tho Corporalion
iUld II,II;h 01 wllllm ,,110111 SClVU lllllll his or hur succussor is appoilllUlJ. A majority 01 Ihe mombers 01 tho Dental
HIIVUIW GlIlIlIIIllh", :;hall 1m dUllli"ls who we membors 01 tho CorpolOtion, and Iho balanco ollho membors
:;h.11I hu Illolllhms ul Iho CorplllaliulI Whll aru subscribors to heallh care contracls ontered into wilh Ihe
CwpwalulII.
Sm;lUHl 4. OlllcOIs 01 Hovlow Cunlllllltoos. lhu Chair mall ollhe Board 01 Directors ollhe Corporation
:;llall ilppoinl Iwu ollicers lur each Huviuw COllllllilleu; a Chairpurson, who shall be one 01 tho membors ollhe
CIJlIUIUlhm, aod a SuclUlary, who sllilllllol bu a mornbor 01 tho ComrTlllloe but shall be an ernployee 01 Ihe
Cwp'Jlallon.lllu Chairpursun sllall prosido al allllloelings 01 tho Commilloe, but shall not vole in any matler
hllln!) considOlml by Ihll COmn\lllllO oxcopl whon necessary 10 break a tie. 1 ho Socretary shall perform Ihe
dlllius wlulIlOIalud ill SoctUJIlS I and B 01 this Articlo X, and such other dutios as tho Chairperson of the
CIJll\lllllluu shallasslgil.
:iuCIUlII !,. Iluviow COllllllilloo Moullngs . Quorulll. Each Roview Conllnitlee shall Illeet at a call 01 the
Cllairpmsun ul 1110 CUII\lllilleo. Muutings 01 uach noviow Conllnillee may also be callod lor any appropriate
Ilalu, Illnu alld place hy allY threo P) members 01 tho Cornmilloo involved. The dato, lime and placo 01 each
Illualulg 01 a Iluvluw Corwllllloo shall bo sotlorlh in a writlen nolice which shall be sent 10 each member of Ihe
CO/llJllltlHl! it ruiJsOImlJle tUlIO ill advanco olll1e meeling.
A malullty ul tho 1Il001llJOrs 01 a Hovluw Commllloe who are providers shall constitute a quorurn lor the
lIallliacluulul hUSlllOSS alld Ihu acls III a maJorlly 01 such Illelllbers prosolll at a meoling al which a quorum is
PII!"ullt shalllJU Iho al;l:; ollhu Iluvluw COllllllitloe. II tho Illolllbers 01 a fluviow Comlllilloo shall sovelOlly or
c"lIucllvuly cOII",,"1 ullanilllously ill wrlllng 10 allY actioll proposod to bu laken by tile Comn\ltloe, such action
;;halllu, as villld ilIl ilelUlII ilS II Ulllll' I II had buulI takoll by tho COlllmitlou al a duly convonud meeling.
tiUI'luUI Ii. SIIIJlIIISI;UlII 01 Mailers III tho Ilovluw COIllII\ltloe. Mailers Illay bo subl1ulIed to a Review
CIUIIlIUlh", hy allY IJlllI ", II III tolloWUI!):
(il) AllY 1111"1111111 III III" COlfUUillllllll1l ollhu lJoald 01 Dlloctw" ollhu ClJIporallun;
(h) I/," :iulll,t:IIIIIII ^ilV"illlY Cmlllcll 01 Ihu Corporallon or tho PlOlusslllnal AdVISory CounCil of the
t;ollltJI.lholl,
EXHIBIT
18
(t:) I ho :;liI:rOI,"y 01 allY IIIlJlllblll 01 a I1nviuw COIIUllIlIuu;
(d) ^"Y I ',lIl1clpallllU I'lIlvidlll 01 I'rohJIIClJProvidor.
M ""1111"" III I", sulllllllled 10 a Iluviuw COllunilleu shallbu sui 100Ih III w,illllU ulld IlnhvurUlJ 10 11m
:.ot:lIJlary III Iho Iluvlow Conllllllluo IIIvolved. 1 hu Ruviuw CUllunilluus shall JIlainlaill wrillen procuulIIes 10
a',"llIu 111011 alll"llvllh,,,, lllC'''VO lull alld lair cUlIsideration uf any issuus prosolllClI Iu Iho COllullIlIuus.
~:Hl.hllll I. (~tlll(Jlal PHU:I!t!dIlIU~i BulolU iI Iloviuw CUlIllllllluu. Thu Soelutary 01 uacll Iloviuw CUlIlrnittuo
~lllilll pH:piJIO illl ilUUlldil ullllu lIIallt:r~i lu IIU cOllsidmou at uuch CUlIlllllttuu lIluuling. Each plOviuUI invulvud
III an",lIli1 huh"u IIlu ConlllllllllU "hall 1m providud wllh a wllllell sOlllJlla,y ollhallllallor a JUasOlmlJlolilllu ill
illlva'll;o uf Ihu 1I1l1UllllU, alld "hall havo Ihu ,iUhllo appeur boloro Iho Conunilleo allho JIloutinu. Each JIloJllbor
III IIlu Cllllllllllloo "'''III hu prllvlllud wllh Iho SUllllllarles 01 all JIlallers to bo cOllsidorod al Iho mooling. No
1111'111111" III a Ilovlow CUlllnlllloo shall pallicipalo in a Roviow Conunilloo's dohllUrations or vole, whore Ihal
"i11Il1' IIIl!JIlbur al,," ,,,,,vml a" i111 a<Jvisurlo Ihu Corporotioll reuurding tho JIlullur under review, unloss oxpressly
rO'lIlll!,lmllll (II, su by Iho provider umlur reviow.
In i:OllsidurinU any JIlallur IlJuuUhl bolore ii, a Roviow Cornrnillee shall have authorily to lake anyone or
JIlOlnol Ihu 10lluWII1U ,1<:lIons:
(a) Ilulur Ihu nlilllUl 10 Ihu olhw l1uview Cornrnillue for appropliale aclion;
(h) nolw Iho cm,u f()J rucu'J\JuolldalioJl or aclion by any apPlOprialo comrnilleo, board or uivision ollhe
~Ialu I'rllfossiuJlal Sm:ruly or Lucal PlOlossional Sociely 01 tho provider involved;
(c) Ilufw Iho JIlallur 10 an applOpriale law enforcemenl oflicur or agency 01 Ihe Federol, Slate or any
l.Ul:al (,OV(!IJ\JlIOnllf Iho CUlIlJnilleu has probable caose 10 boliovo Ihatlhe providor involvod secOled
paynlllfllhllJlllhu CllIplllallon for smvicus porlormod by Iho provider lor a subscriber on Ihe basis of
malmial false illforrnallurr submillod 10 tho Corporation wilh Ihe intention 01 uefrauding it;
(d) nulm Ihu mallm III tho Slatu Profossional Liconsure Bomd of Ihe provider involved;
(u) Ilomler a IIIIlIIIIU Ihal Iho Corporal ion is unlillod 10 a refund of loos paid to tho provider;
(I) Ilomlm a hlll]IIIU Ihat aolhurizos Iho Corporallon 10 colloct any relund by withholding Iulure payments
duu 110m Iho Corporalllln to Ihe proviLler involved;
Ill) II a parl"".lar mailer involvus conducl which would juslify denying a provider registration as a
Paolldpallnu PlOvidur, or tmminallon of a proviuOI as a Pmlicipating Provider ollhe Corporation, the
COllllllllluu may dilUcllhal a homing bo held in accoruance with Seclion8 ollhis Article X 10 consider
Iho provldm's parlldpaling slalus. Such conduct may include:
(i) Vllllallun of tho Parlicipating Provider's ^ureemont;
(II) Vlulalion uf Ihu louulalory logislation applicablo III Iho Corporation;
(III) Vlolallllll of Ihu l1uuulatiuns lor Par\lcipallng ProViders 01 Iho Corporaliun;
(IV) Hulllsal 10 adhmu III Iho hlllirrg, paymont, or servico benollt pruvisions 01 any health plan in
wlllch IIlu plOvldm particlpalos; or
(v) Vlolaltoll III I udlllal or Slalll cruninal slalulHs.
Ih) Il",,,t,,, ,llIch dUC""01l 01 laho allY ulhOl soch acllon as may hu rrocussary ur apPlOpriale to fully
lO~iolvo any lhsputu IHU$C11tud 10 tho Conulllttuu,
~'-..
Appendix B
PENNSYLVANIA BLUE SHIELD
Review Committee Guidelines
1'''"I1',ylv'"II.IIIIIII' :a""ld "1"""II::,lllldUllhlll"llVI'''UIIS ul ^cl UI ul WI:! ('Ill P^. e.s. SUI:lillllll3lJl ul
~it!q I. ~;I!c1HlIlli:I:'jllt;) 011111: Ad wqullo~ thill alllllallOfs, di~pulus or conlluvUlsiu~ wlaliflU In prolmisional
1",,,lIh "",vie" dllLIII'" III "IIY qllc::;lioIl5 IIIVlllvill[J proIO!;silll1,,1 ulhies "hall bo cOlIsidorud alld dulurrnil10d ollly
IIV 111:;11111 ~,I:IVII;l! dllc:hJl~i :il!lt:ch:d ill a 1I1i11ll1or pru~C:f1lJud III tho BV.litw~i 01 1110 plOlussionnl health HUlVicu
t:tll)lIl1illltlll II IvellvwI.
"",1111/1' :alll,ld Ily I"w" (^"III:le Xl "llp"I"lu Ihal nuviuw COll1l111l1uos bu lorlllud 10 COl1Sldur ami dulolll1l1le
'11"111",,, dq II II"" III UIIII,"v""'II'" ""''''ll) olllllllhe rulallol1ship IJUlwcll)n Blllu SIIIllld mill plOlos"inl1al providers
willi 1l!lIdl!1 IInlllllllitllVIj:U~i
11/1, M"dIC,111 h,vlI'w <:l1lllllllll"o CIll1"idw" alll1Jallurs, displllUS or cOl1llOvcrsios IIIVolvil1[J all prolossiol1al
11l11VIIII!1~i WilD 11:11111:1 11l~,11I11 ~it:rVIl:Wi. 1110 (lelllal Huvicw COil III lit Iou CtJllSI(lers Illatlurs. ulspulus or cOlllrovmsius
1I1V1llv1I1H dl!llh:il:i.
II", ""1111"" ,,,1,,,,,,,110 11", IlUV"JW Commlltuus [Junurally cO"GUIIIIIi"poluS wilh respecllo ovurolilllalion
illUl/tI! lIW,lIl1h/;I11l1l11l1 ~;t:I"ILU:;. quality III caro, ~il!lvicu Imlloltt~) alld usual charon proululIls.
lilt! III!lUWIIIH pro!:(!c1ll1us ,IIU tlpphcalJlu 10 lluvlow COllllllittees:
Ill' 11I.1111"" IIlVolvlIl!1 plll""II"lllvurlllih/alllln al1d/or nli';lI11h/allon of SurVICUS or IIlapp'opnulu quahly 01
""", 01 ulI"l'h,l" "'VI"W "i cllIIIllICllldllllho p,ovidur's praclico palllJln p,ior 10 Illlurrallo a Heview
CIIIIII"illl", 1l1l1II1!) 1111:; lIlVIUW, a sampltl 01 palionl Illcords, slalisllcs, diagnosIIC: aids, and/or olhor
,,,1111,,",.11011.111;11111'"'' ,,; "'VI"W"C!. Ih" 'USIIItS 01 ,,"ehlllview, as woll as Ihe complele molhodology
wa,d. will III' 'lIdd" ,1V;lIldhl" 10 IIle p,ovidor whon ,lilY mlvorso Iindln[Js rusult, Should Ihe providur
d";OI\)II" Will, Ih" ,,,,,,,II,; ollhu roview duulo Ihe s:1mplo SiLU. Ihe provider may requesl an oxpandOlI
IIlVHlW.
:'. 11,1 "" ,II,II'''"IIII,d Ihdl ;111 ov"'paymenl has llcon madu, Ihu amounl ollhu ovorpaymenl will be
c'OIh:iIlOlI"d IIlI " "wIIlll 01 lim" 1101 10 ex<:ued Ihal pOfllllllocllly 11m Staluto of Lllnilallons, Thu
"";IIIt,; 01 ,."c1I11VWPOlY'II"1I1 cal<:ula\lons wllIlle mado avallalllu 10 Ihu providur. rhu providur willlle
hll"",h"d Wllh 1I",nllJlhodlllugy usod 10 calculalu Ihe oVOIpaymonl, i'lI:llIlling any variallles osod 10
ildlwit lIIullt yu.lI ovurpaYllIlml dotmminations.
:1. 11111" d",lov"",i1 IIllhu IllV'I!W PIOCUSS Ihal an undurpayrnonl has occurrod. Iho pmvidOl may sook
,,,,,,,lllII,.,,,,,,,,,I, 1I11ll1ulhlhn ""pmp,ialu appealmochanisms. for all claims involved during Ihe same
I""" p","..1 "" Ih" IIJVII'W hy Ill"" ShioH Such claims muslllo supporled by clinical rocords.
.1 1111,,, '":111", w,lIl1c,1 hI! ",lulIl,dlur proseculiun, mill doos nol portailllo a humin[J 10 cOlIsidor wholher a
plOVllh~1 !.lIllllld Ilu sll~;pOlldt!d or hmlllllillud il~ a ParllclpatillU Provl(fur. a Bluo Shield representative will
CHllladlltt: IllOVult!l tu dlSCIlSS all hrllllll{Js. II tho proVlttm clods not tu 11l1.\C1 with a rnprosuIltutiv8 or il a
11lt~JIlIlU CillllllJllJl~ arranqud WIll 1111 a rea5unablo period 01 tllno, lho Il\lormation will he trallsmittod to tho
""lVII'''' I,v 111",1 ^I Ihal 1111111, 11111 prOVider is advised 01 all fllltJIll[JS 01 all advUI"e or prolllull1allC nalure
;111111111111' 011'1'11011'11...1101111:;111" OIv,"I01lllo lollle p,oVlller. .'he plovlllor is plOvllJUtl wllh" dUlailed, wllllon
~ildlt!IIIl~1I11)1l11i1l1ll!lllIu "i1~il~) ul illlY mlllll{J mqum;t. Tho provl(.Jcr is also mlvisud 01 tho repaymont
111'111111" av.llla"", III 111111 IJI Ill", ,JlIII ,,; p,ovidml Willi a copy ollila Huview Conlll\llll~' GllllluhllUS. fhe
PIIIVIl"" Villi I.., ""COIlIi'[JI:d III ~1I"11l11 any mldlllo"ul'lIlollllullnn which wold havII" huarill[J on IlIe
lll.llh:l .lIld/ul tJtl~llt: lIul ba:jl~ It)( a ~;cltlcment or adlllstlllullt to Ihu rolund U1110Ullt loquustmJ. II any.
~l :~lllIlIhl lw II 11'1 UllIlIlltllIH:atIlHl:J 1..1I11u rosult III ill I UUIt!Ulllunt a:.; 10 1110 pruvidtll'S folulIlJinu an
1)1Jt!lpdyllll!IlI, II .lIlY. Of ulllUl IW.Jtlers pUllaillillU to thu reVIOW, lhu provider Will rocuive wraltun
11011111:.111(111 ,111t~d:JllIlIIly (:10) cah:lldiu d,IY5111 advillU':o ullllo date 01 thu Huvl(:w COl1l11llltUO moeting
..I wllll,llllltl provult~I'~ c;a~iU WIll tlU cOIl~.lderud, uf III~ 01 11m nullt to appllal lJululu thu COllllllilloo
;11111111 III~i III 111:1 "Ulll III Ill! It:I1IO~itJlIl(!d IIY 1l!!Jill Ctltlll:il!1. Ihu plovltlor is i1!Jilin OI1COIUtl!J(!(j 10
1""vloI" .1111' 11,11111'1.1111111 wi", IIl11ay 1111 PWllllUllllo 1111, 'W;lIllIliuII ollllu lIIallul. A,;clllllpallYIIll/IIIU
Idlt-I I', ,11'''"'",. "py III III" In,"i 01 olllY IllIUIHIlllqllt>:;I, llio i1ppllcahl" ~t!CIIOIl(S) 011110 Bill!! Sliillld
Ily 1,IW"I"',I.lIIII'hllu IIl1vlt!w CIIIIIIIIIIIl!llS, IlIlllIllVll!W CIIIIII'"IIi,u GUlduhlll!S alld, II apphcalJlu, Ilou
I'.ulh '1';111111) l'IIIVllll:I':i '\UIt!t:lIIl!111 a1uJ 1I111Ih:UlllilIi0l1~i ICIII'iUIIClllilllIIU flroVHII!I~;.
II AI h".1 IIlh'I:III!!,) 1.,111'lld.1I tl.IV!i IHIII! lu lilt: d.llu Clllllt: HUVIl!w COIUlIlllltHJ 11Illulinu at which thu
"'''Vllll~l':; 1..1:.,: will lit: (t1I1~iUIUlUcJ. Ihu plUVltlll1 wlllllu UIVUlI d copy of I!lu dOC;lUIIUlllulIUIl 10 lJo
pll:!iWlh:d III 1110 Hovluw COIIIIIIIIIIlO.
" ^ I II "VII I", III..y hlllV,,"ll1lhlllllillllllllo IlIu lIuviuw COllllllllloo Ill, IIpOIl WIIII(JlIll!qlln:;llo 1100 SuclIllalY
III 1111' C'"1111"I1t!t!, IlIay "PPUolI IIOllI'u IlIu COIIIII III II"" ^ pIOVII/W wllo wqllllsls 10 ilppua, lJulolU
III" CIIIIII",III," \VIII lit! lIolihwl 01 Ilou dalu all(IIIl'"1 ul Iois III 11111 appl!iIIilllCu al luasl IllIuolI (Hi)
1'..1111101,11 ".Iy:; 1"1111 III III1'III1,ullIll!, SUClollolilll:alioll WIll 1I11olllllhu provldlll ollhu oxaclmlllllu 01
1111, 1IIIII,",tllIl\I, III 1111' IIIllVII""'s IIUllllu rup,uslJIllllis llIl1U1dlsauooUlllolIl alldlo ProVIIJO uny olher
Inlllllll.,11I11I wlll.h Will illd 1111' Conllllilh,lJ in ils duhlJllIahon ollhu lIIallUl,
/I, M,lIh',,; ..dl,,,lllllllllo hll IJloo!Jhl hulolU Iho Roviow COlllmilluu will nul uUIJUl,Il0lillud on a lormal
III all IIII""I1,t1lla~as holwuulI nlllo SlIidd SI~II alld COllllllllleu IIllllllhUlS pnlll 10 Ihl) schedllluddulo
,,1/111' COUllllllh,u IIIUullll!! uxcupl ill II,u mqllusl ollhu providur, Shollld 1110 PIllVIUur lIIaku soch a
""1'11':;1, lI,u """llIs Will liu IIIlIy di!iclo!md 10 tho pruvllllll in wllllnu.
!J, A ll"vlulV (;"nlllllll""',, Ctlll:;IIle,alloll 01 any lIIallor, dlspllle or conlrovOlsy conGOInlllg a prllvltlu,
who h.,,; ruqlluslod 10 ilppUdI Will hu conlinllud unlll allnr Iho schedulud appuaranGe of Ihe plllvidlll
uxcepl as lolluws:
il II Ihll I"IIVlllill IS 1IIIIIliud of Iho COlllnlllloo nluolillg 45 UI mOlll calOlllla, days in advance 01
"Udllll""'"'U illIll .u/visus Ihu Sucrolary ollhu COlllnlllluu Ihill hu or sho wishes 10 .llIund bullS
'"'illlle III Iltl "1tJ~1II11 011 /l1l1 spot;,lic dalo SGhullulo(I, Iho Coolllllllue will plocued wilh ils
\.1I01illJllIil11lJII olllillllla/ler. Ilowover, Ihu plovidur wllIlJe !Jivun Iho opporlunily 10 appeal before
Iho GlInllllllh,u ill lis 'IlIXI schodolml muelillg,
Ii, II 1I111111cillllllllS senllu..s Ihall 45 calendar days prior 10 1110 COllllnillue lIIuoling and Ihe provider
..dv,,;us II,,, Sllc,ulil'y 01 Iho (;olllnulluu Ihal ho or slm wishes 10 allend Iho lIIuoling, lJul is
oll.,i1lu III tlo so 011 IIle :;plJCIIIC datu schedulutJ, Ihe provider wiIIlJu granlotJ OliO conlinuanco.
I hu GonllllllhJU will p,oclIlId wllh lis considmalion ollhe lIlallUl allho nux I schedulud mueling
II 1111' provlIl"" 10lloWIII!J nollf,Gali(1I1 as provldUlllor in IIulII 5 ubovo, lails 10 appear.
III lollllWIIIU lI,u llevlllW Clllllnlllluo lIIuolillU, Iho provider wliI bo advisod in wriling wilhill Ihirly (30)
t:illllll".u d.IYs 01 illl dOlu,nunaliuns mat Ie by Iho COllllllilloo. Such nOhlicalioo will include, bul not
111I1"'"lod ItJ, 1110 dlnu'"11 01 ilny rulWlll ill isslle, Iho lacls and ruasoning SllpporlinU Bluo Shield's
l:,uII:III'"'"", dI'd, Ill' PilIlu:!palinu Plovidors, Ihe spuclfic basis in Reuulallon 01 8hlll Shiuld's clailll.
I (JI 1I1l/IiOlllilllUls 1IIV0lvillU 11111 pallicipalll1U sial us of a providor, Iho prllvidlll will lie notified wilhin
IIl11ly (:III) t:illo,ulal t/..y,; lollowinu a dolorlllirlillion by Ihu Sucrelary 01 fluallh,
II, AllY lJV':IJ1i1Yllltllll illlllJlJIIls wlllch Ilavo 1101 huon rulUHlUlJ 10 131110 Shiel,f willllll Ihilly (30) calundar
dilYs UllllJlllu:illloII uf 1110 Hoviuw COllllllilluu's dulurlllinalion will UO suhjocl 10 wilhholding 01
P,IY'""III:; d,", ""' 1'.II11cIJlilIiIlU I'luvitJer alltJ Ihe aSSUSSIIIIIlI1 01 inleros!. Inlerusl will also ho assossod
ulIlI".lilllllltllll JI.lYllltlnl iIIlilllUtJIllUllls wlllch oxcoud UO days. Tllo ralo 01 inluresl is basud upon thu
!Jllll.lY i111i1SIIIY 1I1111alu "' ollllcl al lI,u buuinllinu 01 Ihu calulI(!ar "ua,lur dt/nng which a Iluviuw
ClJlIllllllttlH dt:Cl~.I(llI or III! 1I1~lalhlllml ,opaynuml aUlcuuu:1I1 is reuched.
I:' II IIltl Il"vlt'w <:111111111111'" tI"'tlllllllIU:; Ihal a Ile'lIing shl/llld Illl hllld 10 COIISICJur whlllhur a provider
:.lIlJldtlllt: ~;II:;J1I:IIt1I!tI Of It!llll1llalt~d as a PWllclpallnu PruvulUl. Il1u p,ocumJifl!J:..i wllllJo conducled
.I:i ',Ill IlJl II I "' ^,IIc1tl X, S,":IIIII,ll, 01 tho Uluo SIlIuld lIy,laws, alld In Iho lIIi11l11er tluscnbutl in Ihesu
UlUlJulull!s
? ..
'. "",,:,.--;,.,
~~ ~ ~"',;~.r '"._,_...,
THE LAw OFFICES OF SPERO T. LApPAS
205 5l'A TE S TREI'T
POST OFFICE BOX BOB
HARRISBURG. PENNSYLV,\NIA 17108.080B
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-
LESLIE WEINRICH, D.C.
Plaintiff
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNA
v.
Civil Action - Law
PENNSYLVANIA BLUE SHIELD
Defendant
No. 97-2288 Civil
Jury Trial Demanded
NOTICE TO PLEAD
To: Leslie Weinrich, D.C.
clo Spero T. Lappas, Esquire
205 State Street
P.O. Box 808
Harrisburg PA 17108-0808
You are hereby notified to plead to the within New Matter within twenty (20)
days after service hereof, or a judgment may be entered against you.
Eckert Seamans ClIerin & Mellott UC
. ()
tz, Esqu re /'
1589 ( )
Bridget . Montgomery, Esquire
J.D. No. 56105
213 Market Street
P.O. Box 1248
Harrisburg PA 17108-1248
Attorneys for Defendant
Pennsylvania Blue Shield
DATE: August 12, 1999
...
medical expenses incurred by subscribers under such contracts are reimbursed. Highmark
reimburses eligible health care providers for eligible services rendered to such subscribers,
4. Paragraph 4 states conclusions of law to which no response is required and,
accordingly, it is deemed denied. By way of further response, Highmark states that the
allegation that Defendant acted through agents and servants not named in the Petition is so
vague an allegation that Highmark is without knowledge sufficient to form a belief as to the
truth of the allegation and, accordingly, it is further deemed denied.
5. Paragraph 5 states conclusions of law to which no response is required and,
accordingly, it is deemed denied.
6. Admitted in part and denied in part. To the extent that paragraph 6 makes an
allegation with respect to the statute of limitations, it is a conclusion of law to which no
response is required and, accordingly, it is deemed denied. It is admitted that Plaintiff,
Leslie Wenrich, D.C., submitted certain invoices to Highmark requesting payment for
services provided to Highmark subscribers. To the extent that paragraph 6 implies that
Highmark was obligated to reimburse Plaintiff for such invoices, it is denied. By way of
further response, Highmark avers that the invoices submitted to Highmark by Plaintiff were
rejected for reimbursement because the services rendered were diagnostic x-rays taken by
Plaintiff using x-ray equipment which Highmark could not ensure met accepted standards of
quality. Highmark's inability to ensure that the x-ray equipment met accepted standards of
quality was due to Plaintiffs refusal to cooperate in Highmark's quality review by submitting
additional information needed to complete the quality review, which refusal was a violation
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"
of Plaintiffs obligations under his Participating Provider Agreement. Thus, Highmark's
denial of reimbursement for the x-ray services was justified and lawful.
7. Denied as stated. The correct characterization of the events that occurred
subsequent to the submission of invoices to Highmark for reimbursement for certain x-ray
services rendered to Highmark subscribers by Plaintiff is as follows: Highmark informed
Plaintiff that it would be forced to deny reimbursement for x-ray services rendered to
Highmark subscribers by Plaintiff because of his failure to provide additional information
needed for Highmark's quality review. further informed Plaintiff that it would have to inform
the subscribers of the reason for the denial of reimbursement, and gave Plaintiff the
opportunity to avoid this occurrence by submitting x-rays for quality review. See Letter
attached as Exhibit 2 to Plaintiffs Petition. When Plaintiff did not cooperate with the
quality review requests, Highmark sent Explanation of Benefits ("EOB") forms to the
subscribers explaining that no reimbursement would be made and stating the reason.
8. Denied as stated. Plaintiff has attached the EOB form (which he has
characterized as a "Notice,)" as Exhibit "I" to this Petition. The EOB form is a writing,
which speaks for itself. Any allegation of paragraph 8 that conflicts with the language set
forth on the EOB form is denied.
9. Denied as stated. The allegations of paragraph 9 make reference to the Letter
attached to Plaintiffs Petition as Exhibit "2," which explains Highmark's position with
respect to Plaintiffs x-ray equipment. The letter is a writing, which speaks for itself, and
any allegation of paragraph 9 that conflicts with that writing is denied.
-3-
...
10. Denied. Highmark made a delermination about the standard of quality of
Plaintiffs x-ray equipment based on Plaintiffs refusal to submit sample x-rays for quality
review, which refusal violated of his Participaling Provider Agreemenl. By way of further
response, it is denied that Highmark's determination was "falsely reported" to any patient.
Highmark sent an EOB form to the Highmark subscribers (a sample of which is allached to
Plaintiffs Petition as Exhibit" I "), which is a writing and speaks for itself.
II. Denied as staled. The allegation that Highmark made an "assumption" based
upon an "feeling" wilh respect to whether Plainlifrs x-ray equipment satisfied the standards
of quality is a mischaracterization of events. As set forth in the leller from Highmark
allached to Plaintiffs Petition as Exhibit "2", Highmark repeatedly requested samples of x-
rays for the purpose of performing a quality conlrol review to ensure that Plaintiffs x-ray
equipment met accepted standards of quality in his community. Plaintifrs failure to comply
with Highmark's repeated requests for sample x-rays was a violation of his Participating
Provider Agreement.
12. Denied as stated. By way of further response, Highmark incorporates the
responses set forth in paragraphs 6, and 9-11, above as though fully set forth herein.
13. Denied as stated. By way of further response, Highmark incorporates the
responses set forth in paragraphs 6 and 9-11, above.
14. Admilled in part and denied as slated in part. Highmark admits that it sent
EOB forms to the six (6) patients named on the list allached to Plaintiffs Petition as Exhibit
"3". Highmark denies that the information set forth on the EOB forms was false or
-4-
..
defamatory. By way of further response, Highmark incorporates its responses set forth in
paragraphs 7, 8, and II, above.
15. Denied. To the extent that paragraph 15 contains factual allegations that
Highmark made false statements, such allegations are denied. The allegations of paragraph
IS, alleging that Highmark made statements that were "defamatory" to Plaintiff are denied as
conclusions of law to which no response is required. By way of further response, Highmark
states that it is without knowledge sufficient to fonn a belief as to the truth of Plaintiffs
allegation that the EOB fonns caused any of the consequences for Plaintiffs reputation
averred in paragraph 15 of Plaintiffs Petition.
16. Paragraph 16 states conclusions of law to which no response is required and,
accordingly, it is deemed denied.
17. Paragraph 17 states conclusions of law to which no response is required and,
accordingly, it is deemed denied.
18. Paragraph 18 states conclusions of law to which no response is required and,
accordingly, it is deemed denied. By way of further response, the statements made by
Highmark with respect to Plaintiffs x-ray equipment are set forth in the Eon fonn attached
as Exhibit" 1" to Plaintiffs Petition and, as a writing, the EOB fonn speaks for itself.
19. Paragraph 19 states conclusions of law to which no response is required and,
accordingly, it is deemed denied.
20. Highmark is without infonnation sufficient to fonn a belief as to the truth of
the allegations set forth in paragraph 20 and, accordingly, they are deemed denied. To the
-5-
..
diagnostic x-rays. The Complaint, which Plaintiff has allached as Exhibit "4" to Plaintiff's
Petition, is a writing which speaks for itself and any allegation in paragraph 24 of the
Petition that contlict with or may be interpreted to contlict with the writing is denied.
25. Admilled. By way of further response, Highmark states that the Preliminary
Objection to Plaintiffs original Complaint based upon Plaintiffs failure to invoke his
contractual remedies as set forth in his Participating Provider Agreement, was granted by this
Court.
26. Admilled in part and denied in part. It is admilled that the Court sustained
Highrnark's preliminary objection to Plaintiffs original Complaint for failure to submit the
Complaint to Highmark's Medical Review Commillee, as required by Plaintiffs Participating
Provider Agreement. By way of further response, Highmark states that the Order and
Opinion, which are allached to Plaintiffs Petition as Exhibit "5", are public documents,
which speak for themselves, and which contain holdings and reasoning in addition to those
reference in paragraph 26 of Plaintiffs Petition. To the extent that paragraph 26 may be
interpreted to contradict the document itself, such allegation is denied.
27. Admilled.
28. Admilled in part and denied in part. It is admilled that Plaintiff made
complaints about the Medical Review Commillee. Plaintiff did so by way of severallellers
addressed to the Medical Review Commillee. Copies of those lellers are allached to this
Answer as Exhibit" A". The lellers, as writings, speak for themselves and any allegation set
forth in paragraph 28 of Plaintiffs Petition that contlicts with the writings is denied.
-7-
-
29, Admilled in part and denied in part. Highmark admits that eounselto the
Medical Review Commillee, Thomas Wood, Esquire, wrote to Plaintiffs counsel addressing
Plaintiff's complaints about the composition and procedures of the Medical Review
Commillee. It is denied that such lellers characterized any aspect of the commillee's
composition or procedures as "defects". By way of further response, Highmark states that
the leller wrillen by Thomas Wood, Esquire, which is allached to Plaintiffs Petition as
Exhibit "6", is a writing which speaks for itself and any allegation set forth in paragraph 29
of Plaintiffs Petition that conflicts with the writing is denied.
30. Admilled in part and denied in part. Highmark admits that Plaintiff has
correctly quoted part of a sentence from the leller sent to Plaintiff's counsel by Thomas
Wood, Esquire. The "quote" is provided without reference to the surrounding context and
any implication that they referenced quote supports Plaintiffs claim in the present action is
denied. By way of further response, the quote is contained in the leller that is allached as
Exhibit "6" to Plaintiffs Petition, which is a writing that speaks for itself and any
implication in paragraph 30 that conflicts with the writing is denied.
31. Denied. Plaintiffs characterization of the Pennsylvania Supreme Court's
holding in Rudoloh v. Pennsvlvania Blue Shield, 717 A.2d 508 (1998), is incorrect. The
Supreme Court's concern in Rudolph was with whether a majority of the Medical Review
Commillee is composed of members of the Highmark Corporation or members of its Board
of Directors. By way of further response, Highmark states that the Rudolph opinion is a
public document, which speaks for itself, and any allegation of paragraph 31 of Plaintiffs
Petition that conflicts with the wrillen opinion is denied.
-8-
..
32. Admitted in part and denied in part. Highmark admits that three members of
the Medical Review Committee are corporate members of Highmark and that they are the
individuals identified in paragraph 32 of Plaintiffs Petition. It is denied that anything set
forth in Thomas Wood, Esquire's letter, which is attached as Exhibit "6" to Plaintiffs
Petition, was "not accurate." By way of further response, to the extent that paragraph 32
implies that it is improper or unlawful in any way for the Medical Review Committee to
include three corporate members of Highmark, it is denied. The Medical Review Committee
consists of at least eight members, pursuant to Article 9.2 of Highmark's By-Laws as
amended November II, 1998. A copy of the amended By-Laws is attached hereto as Exhibit
"B". In fact, Highmark's Medical Review Committee consists of ten members, only three of
whom are corporate members of Highmark. Accordingly, the composition of Highmark's
Medical Review Committee is lawful under the Supreme Court's opinion in Rudolph.
33. Admitted in part and denied in part. Highmark admits that it was aware of the
composition of the Medical Review Committee and aware that three members of the
commiuee are corporate Highmark members. To the extent that paragraph 34 implies that
there is anything improper or unlawful about that composition or about Highmark's
knowledge of that composition, it is denied. Further, to the extent that paragraph 33 avers
or implies that Highmark had an obligation to disclose to Plaintiff prior to his hearing before
the Medical Review Committee that there were three corporate Highmark members on the
Medical Review Committee, it is denied.
34. Denied as stated. Highmark admits that Plaintiff appeared with his counsel for
a hearing before the Medical Review Committee on or about May 4, 1999, and that the
-9-
Medical Review Committee issued a Decision with respect to Plaintiffs complaint about the
EOB fonns sent to Highmark subscribers concerning Plaintiffs x-ray services. To the extent
that paragraph 34 refers to the May 4, 1999, hearing as an "alleged" hearing and, thereby,
implies that there was something improper or unlawful about the hearing, the allegation is
denied as a fact and a conclusion of law. By way of further response, to the extent that
Plaintiffs allegation in paragraph 34 suggests that the Decision dated June I, 1999, is in any
way invalid, it is denied as a fact and as a conclusion of law.
35. Denied. The Medical Review Comminee's June I Decision addressed the
issues raised by Plaintiff concerning the EOB fonns sent to Highmark subscribers concerning
Plaintiffs x-ray equipment. By way of further response, the Decision, which is anached as
Exhibit "7" to Plaintiff's Petition, is a writing which speaks for itself and any allegation of
paragraph 35 that conflicts with the wrinen Decision is denied.
36. The allegations of paragraph 36(a)-(s) state conclusions of law to which no
responses are required and, accordingly, they are deemed denied. By way of further
response, Highmark states that, to the extent that the Plaintiff suggests that he should be
pennined to call witnesses, present evidence other than his own statements and the
presentation of his counsel, an opportunity to challenge witnesses through cross..examination
or evidence, it is denied that the law or any other source requires that Plaintiff be given such
an opportunity. By way of further response, Plaintiffs reference to Article X, Section 2 of
Highmark's By-Laws, set forth in paragraph 36(e) and (I) is inaccurate. The By-Laws that
address the Medical Review Comminee were amended effective November 11, 1998, and the
section that addresses the Medical Review Comminee is now Article IX. Further, the By-
-10-
.
Laws allached as Exhibit "8" to Plaintiffs Petition have been amended effective November
11, 1998, The amended By-Laws, as noted previously, are allached hereto as Exhibit "B".
Further, the allegations set forth in paragraphs 36(0 and (m) imply that the Medical Review
Commillee is without authority to hear Plaintiffs claim, which he has characterized as a
"defamation" claim, That issue was disposed of by the Honorable George E. Hoffer,
President Judge, in the Opinion allached to Plaintiffs Petition as Exhibit "5" and any
allegation or implication set forth in paragraph 36(0 and (m) that conflicts with the Opinion
is denied as a conclusion of law. By way of further response, to the extent that Plaintiff
avers that the members of the Medical Review Commillee were improperly influenced or
conducted the hearing with respect to Plaintiffs Complaint in an unfair, partial, bias way or
in a manner that was predisposed in favor of Highmark, such allegations are denied as a
mailer of fact. Further, to the extent that Plaintiff has alleged in paragraph 36(h) that the
payment of the members of the Medical Review Commillee is improper or unlawful in any
fashion, it is denied as a fact and as a conclusion of law to which no response is required.
37. WHEREFORE, Highmark respectfully requests that this Court dismiss
Plaintiffs Petition, with prejudice, deny Plaintiffs requested relief, and enter judgment in
Highmark's favor.
NEW MATIER
38. Highmark incorporates the avennents set forth in Paragraphs 1-37, above, as
though fully set forth herein.
-11-
that the participating provider supply any information necessary to determine whether the
covered service satisfies accepted standards of practice.
44. Pursuant to the provisions of the By-Laws, Regulations, and the Health
Services Plan Corporations Act, Plaintiff must submit all matters, disputes, or controversies
arising out of his participating provider relationship with Highmark to the Medical Review
Committee.
45. Pursuant to the Regulations, each participating provider must permit Highmark
representatives to make reasonable examination of his clinical records, including x-rays,
relating to any covered service performed for Highmark subscribers, when such examination
is necessary to resolve any question concerning such services.
46. Pursuant to the Regulations, each Participating Provider must cooperate with
utilization committees, or other similar committees, established by his state society, and sub-
division thereof, or by Highmark.
47. Pursuant to the Regulations, all matters, disputes or controversies relating to
the services performed by Participating Providers or any questions involving professional
ethics shall be considered, acted upon, disposed of and determined only by providers in the
manner provided by the By-Laws of Highmark.
48. Pursuant to the By-Laws, the Medical Review Committee may render any
decision or take any other such action as may be necessary or appropriate to fully resolve
any dispute presented to the Committee.
49. Nothing in Plaintiffs Participating Provider Agreement, the Health Services
Plan Corporations Act, the Pennsylvania Supreme Court's opinion in Rudoloh v.
-13-
Pennsvlvania Blue Shield, 717 A.2d 508 (1998), the Highmark By-Laws or the Highmark
Regulations for participating providers entitles Plaintiff to the procedures he avers were
lacking in his hearing before the Medical Review Commillee.
50. The conduct that Plaintiff complains was defamatory, i.e, notifying Highmark
subscribers through the EOB forms of the reasons for the denial of reimbursement for
diagnostic x-rays taken by Plaintiff, is absolutely privileged because it is required by a
provision of the Unfair Insurance Practices Act, 40 P.S. ~1171.5(a)(10)(XIV).
51. 40 P.S. ~117t.5(a)(10)(XIV) provides that it is an actionable unfair claim
selllement practice to fail to promptly provide a reasonable explanation of the basis in the
insurance policy, in relation to the facts or applicable law, for denial of a claim or for the
offer of a compromise selllement.
52. 40 P.S. ~1171.6 absolutely precludes liability for statements of information
provided by any insurer in complying with the Unfair Insurance Practices Act.
53. 40 P.S. ~~1171.5 and I t71.6 are made expressly applicable as a mailer of law
to Highmark pursuant to 40 P.S. ~1171.3, which provides that professional health services
plan corporations are subject to the provisions of the Unfair Insurance Practices Act.
54. 40 P.S. ~~1171.5 and 1171.6 render the EOB forms sent by Highmark to
subscribers explaining the reasons for the denial of payment for x-rays taken in Plaintiffs
offices absolutely privileged.
55. A defamation claim must be dismissed as a mailer of law where the Court may
determine from the face of the complaint and statutory law that the conduct complained of is
privileged.
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-'
THE Lo\w OFFICES OF SPER.O T. WPAS
205 ST^n: STREET
POST OFFICE BOX BOB
I-!t\RRISBURC. PENNSYLV~,^ 1710B.OBOB
SPERO T. WP,<S
ANN E. MIANO
AJlI.\ CODE 717
TUDHOJolE 2J8'4211e
FAX 238'4825
January 20, 1999
John I. Dubs, Director Benefits Management
Pennsylvania Blue Shield
P. O. Box 8900a9
Camp Hill, PA 17011
In re:
Leslie Wenrich, D.C. v. Pennsylvania Blue Shield
My File: P.C. 1196030
Dear Mr. Dubs:
Thank you for your letter of January 14, 1999. As you mayor
may not know, this case began with a lawsuit filed against Highmark
in the Court of Common Pleas of Cumberland County. It was
dismissed upon Highmark's Motion that the matter be presented to
the medical review committee as Dr. Wenrich's exclusive remedy. In
order that this can be included in the summary mailed to each
committee member, I am enclosing a copy of the Complaint filed with
the CUmberland County Court. This represents our statement of the
case at the time it was filed, and may be subject to amendment in
light of the fact that we believe there have been additional
defamatory publications since the date of this filing.
I do have a few concerns about your explanation of your
procedures. First, 30-45 minutes is in no way adequate to present
our case. We will require and expect the production of witnesses
(most of who are Highmark employees) to be present and examined at
this hearing. I hope that you will arrange for the appearance of
the witnesses identified on the enclosed witness list and confirm
to me that these witnesses will fact be available for examination
at this hearing. Second, because your letter raises substantial
questions concerning the adequacy and fairness of the medical
review process, we will expect the hearing to be stenographically
recorded so that any subsequent court challenges to the procedure
can have the benefit of this transcript.
Next, the Plaintiff's presentation will be done by attorneys
from this office, Dr. Wenrich may appear as a witness to testify in
his own behalf, but we will be conducting the hearing. A review of
our court complaint shows that this case is not one which includes
"questions...of a medical nature;" rather, these are out and out
THE LAw OFFICES OF SPERO T. lAl'PA5
205 STATE STREET
POST OFFICE BOX 606
HM-RI5BUR.G, PENNSYLVANIA 17106.0606
lPER.O T. l.'.PPM
mN E. AAlANO
AAE.~ CODE 717
TELEPHONE 238'4288
FAA 238'4826
March 8, 1999
John DUbbs, Director Benefits Management
Secretary, Medical Review Committee
Pennsylvania Blue Shield
Camp Hill, PA 17089
In re:
wenrich v. Highmark
Dear Mr. Dubbs:
Thank you for your letter of March 3, 1999.
The proposals you make in that letter, which largely reaffirm
the position which you .took in your previous correspondence, are
wholly inadequate to a fair hearing and disposition of Dr.
Wenrich's claim against Highmark. As I'm sure your company's trial
counsel (Attorney Bridget Montgomery) will confirm for you, the
court's decision to dismiss Dr. Wenrich's court complaint was based
in large part upon Highmark's assurance that a fair hearing was
available before the Medical Review Committee. '{our description of
the limitations which are imposed upon my client before that
commi ttee, even in the face of our requests that reasonable
procedures be utilized, convinces me that it would be appropriate
to return to the court of common pleas asserting that the medical
review committee procedures are inadequate.
In order, however, to fully comply with the request that you
make in the letter, including your request that I describe "the
outcome desired by Dr. Wenrich" I am enclosing a copy of our latest
and last demand letter which we believe you may already have
available to you in your file.. This financial demand remains
available for you to accept. I want to make our position perfectly
clear: In your letter you stated that we would not have the
opportunity to swear or examine witnesses, we would not be able to
make meaningful challenges to the composition of the committee
(because any challenges we make "will likely not be acted upon"),
we will be limited to a period of time of no more than one hour
with respect to a case that would very likely take a few days to
present adequately, and despite our requests that the hearing be
constituted and conducted in a fair manner, you have assured me to
the contrary that this hearing will be held in "the MRC's usual
manner" which is precisely the manner which I was complaining
about.
3.2.3 to determine the requisites for persons oflow income eligible for benefits
lmder the Corporation's health care plans provided, however, that such determination shall be
Ilpproved by the Insurance Commissioner of the Conunonwcalth of Pennsylvania; and
3.2.4 to adopt amendments to these Bylaws lIS provided in Article xm below.
3.3 Classification of Members. There shall be two clllSses of Members - Professional
Members and Lny Members:
3.3.1 Professional Members. There shall be thirty-nine (39) Professional
Members. To be digible to serve as a ProCessional Member, an individual must be a health
service doctor, lIS defined in the Nonprofit Professional Health Services Plan Corporation Act (40
I'a. 9 6301 ~ ~.. as amended) (the "Blue Shield Act"), emolled with the Corporation as a
participating health service doctor ("Participating Doctor"), and be a resident of the Conunon-
wealth of Pennsylvania at the time of such election, and not be more than seventy years of age at
L1e date of election or re-election. If, while serving as a Professional Member, the Member
ceases to be a Participating Doctor or a resident of the Commonwealth of Pennsylvania for any
Nason, the ProCes~ional Member's membership shall automatically tenninate. Professional
Members shall be divided into the following categories:
Doctors of Medicine
DOl,tors of Osteopathy
Dortors of Dental Surgery
Doctors of Podiatry
Doctors of Optometry
The Professional Members shall be allocated among the above categories of Professional
Members in such equitable manner as the Board of Directors may detennine from time to time.
3.3.2 Lav Members. There shall be one hundred seventeen (117) Lay Members.
To be cligible to serve as a Lay Mcmbcr, an individual must, at a minimum, be a resident of the
Commonwealth of Pennsylvania at the time of such election, not be more than seventy years of
age at the time of election or re-elcction, and not be a health service doctor as defined in the Blue
Sh.ield Act. If, while serving as a Lay Member, thc Member ccascs to be such a resident of the
Commonwealth of Pcnnsylvania for any rcason, the Lay Member's membership shall auto-
matically terminate.
3.4 Geographic Distribution of Members. Professional Members and Lay Members
shall be elected from the following service arcas (each a "Service Area") in the following
numbers:
3.4.1 Western Pennsvlvania. Ninetcen (19) Professional Members and fifty-
nine (59) Lay members shall be elected from the Service Area in which Blue Cross of Western
PllMSylvania is auth.orized to use the Blue Cross service marks on December 31, 1995;
-2-
~ .-....... ~- - .-
...... ~ "
3.4.2 EllStem Pennsvlvllllia. Ten (10) Professional Members and twenty-nine
(29) Lay Members shall be elected from the Service Area in which Independence Blue Cross is
Duthorized to use the Blue Cross service marks on December 31, 1995; and
3.4,3 NorthellSt and Central Pennsv1vania. Ten (10) Professional Members and
t'.venty-nine (29) Lay Members shall be elected from the combined Service Areas in which
Capital Blue Cross and Blue Cross of Northeast em Pennsylvania are authorized to use the Blue
Cross servjc~ mar~s on December 31,1995.
3.5 Ek,,;tion of Members. Except for those individuals appointed to serve as
Members of the CClrporation on the effectivll date of these Bylaws, the Members shall be elected
by the Members at any annual or special meeting of Members as provided in these Bylaws. All
nominees for Members to be elected at any annual or special meeting shall be submitted to the
Members by the Nominating Committee appointed by the Board of Directors for this pwpose as
provided in these Bylaws. Notwithstanding any other provision in this Article m, during the
p~riod following the Effective Date of these Bylaws until the Corporation's annual meeting of
Members in 1999, seventy (70) percent, Or as close thereto as practicable, of the Members shall
b.~ Lay Members and thirty (30) percent, or as close thereto as practicable, shall be Professional
Members.
3.6 Tenn of Members hill. Except for those individuals appointed to serve as
Members of the Corporation on the effective date of these Bylaws for the term or terms so
d.:signated, all Members shall serve for a term oftbree years (or when filling a vacancy, the
lUlexpired portion Clfthe term) beginning with the final adjournment of the meeting of Members
al which they are elected and continuing until their successors have been elected and have
qualified. An individual who serves as the Chief Executive Officer of the Corporation shall be
d~emed to be a Member of the Corporation so long as such individual continues as the Chief
Etecutive Officer (lfthe Corporation. Approximately one-third (1/3) of the Members shall be
elected at each annual meeting of the Members.
3.7 Removal of Members. Any Member, except the Chief Executive Officer, may be
removed by the thn:e-fowtbs affirmative vote of the Members present at any duly convened
meeting of Members,
3.8 Vacancies. Any vacancy occurring during the term of membership of IIIlY
Member shall be filled for the unexpired portion of that Member's term in the same manner as
that followed for the original election of the Member whose office has become vacant.
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. ~ A ...
" .
3.9 ~etinlls.
3.9.1 Annual and Soecial Meetings. The annual meeting of Members for the
election of Members and Directors and such other matters lIS may properly be brought before the
meeting shall be h<.:ld during the month of April or May of each year or at such other date, and at
such time and place as determined by the Chairperson of the Board of Directors of the Corpora-
tion. Special meetings of the Members may be called at any time by the Chairperson of the
Hoard, by the Chief Executive Officer. by a majority of the Board of Directors. or at the written
r~quest often percent (10%) of the Members. Meetings of the Members may be held at any
j:(ace within or wilhout the Commonwealth of Pennsylvania.
3.9.2 Notice. Written notice of the time and place of all meetings of the
Members shall be delivered to each Member at least fifteen (IS) days prior to the date of such
meeting (unless a longer period of notice is required by applicable law. by the Articles of
Incorporation or by these Bylaws) and, in the case of special meetings, shall state the general
nature of the business to be transacted. Written notice shall be delivered personally or by mail.
l1'mailed, such notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the Member at such Member's most recent address listed in the
ll:cords of the Corporation.
3.9.3 Ouorum. Thirty-five (35) Members shall constitute a quorum for the
lIansaction ofbusiJless at any meeting of Members, unless a greater proportion is required by
ajlplicable law, the Articles of Incorporation or by these Bylaws.
3.9A Voting. Each Member shall be entitled to one vote on each ~atter duly
p7esented at any m<.:eting of the Members. Unless a greater percentage ofvotes is required by the
Articles of Incorporation, these Bylaws or by a governing statute. any matter duly submitted to
the membership shall be approved upon receiving a majOrity of the votes which all Members
present at a duly convened meeting arc entitled to cast. Members shall not be entitled to vote by
pl'OXY or by mail bnllot at any Member meeting. The manner of voting as to each matter shall be
in person.
. 3.10 Con lOensation. Members may be compensated for their reasonable expenses in
attending regular or special meetings of the Members, When Members arc serving officially on a
specific assignmenl by the Board of Directors, the Executive Committee, the Chairperson of the
BJard or the Chief Executive Officer, Members may be compensated in such reasonable amount
~ may from time tll time be determined by the Board of Directors.
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........".
ARTICLE IV
Board of Director~
4.1 fllwers and Duties. The business and affairs of the Corporation shall be managed
under the direction of the Board ofDirectors, Without limiting the generality of the foregoing,
the Board ofDire~tors shall have full power and the duty:
Corporation;
4.1.1 to set policies and provide for carrying out the purposes of the
4.1.2 to make rules and regulations for its own government and the government
olf the committees appointed by the Board, ex:cept as otherwise may be provided in these Bylaws;
IUld
4.1.3 to adopt III1d amend from time to time such rules and regulations for the
l:onduct of the COlporation as may seem appropriate or desirable.
4.2 Number/Oualifications.
4.2.1 The Board of Directors (sometimes referred to as the "Board" and
individually memhers thereof referred to as "Director" or "Directors") shall consist of such
number of Directors as the Board of Directors may from time to time detennine, but in no case
less than twenty-one (21) or more than thirty-six (36), including the individual then serving as the
ChiefEx:ecutive Officer of the Corporation who shall be a member of the Board of Directors,
during his or her term of office (the "Ex-Officio Director"). The ChiefEx:ecutive Officer shall
!:.ave the right to VIlte as a Director and shall be counted in IIlTiving at the number of Directors
who shall be Lay Members or the number who shall be Professional Members, as the case may
be. To be eligible to serve as a Director, an individual must be a Member of the Corporation.
and, no Member shall be elected or reelected to serve as a Director who will have attained the
age of seventy (70 I on or before the date of election or re-election. An individual who shall cease
to) be a Member shall automatically cease to be a Director.
4.2.2 The Directors shall be divided equally into three (3) classes so that one
third (1/3) of the aggregate number of Directors (or as close as practicable to one-third depending
on the aggregate nllmber of Dircetors) may be chosen each year.
4.2.3 The Board oCDirectors shall be divided between the number of Members
who shall be Lay Members and the number of Members who shall be Professional Members so
3:1 to assure as closely as is practicable that seventy-five (75) percent of the total number of
Directors shall be Lay Members and twenty-five (25) percent of the total number of Directors
shall be Professional Members, provided that during the period following the Effective Date of
these Bylaws untillhe Corporation's annual meeting of Members in 1999, seventy (70) percent,
.,-
.......".
or as close theret(. as practicable, of the Directors shall be Lay Members and thirty (30) percent,
~r as close thereto as practicable, shall be Professional Members.
4.3 &Ipction and Tenn.
4.3.1 The Ex-Officio Director shall serve as Director by virtue of the office held.
'=:xcept as provided in Section 4.4 of these Bylaws, the remaining Directors shall be elected by
lhe Members with approximately one-third of the Directors elected at each Annual Meeting of
Ihe Members.
4.3.2 All Directors, except the Ex-Officio Director, shall serve for a tenn of
lhrce years or until their successors arc elected and have qualified. The Ex-Officio Director shall
l:erve as a Director so long as such Director serves as the Chief Executive Officer of the
Corporation.
4.3.3 Except as herein provided, no individual Director shall be eligible to serve
lIS a Director for more than four (4) consecutive terms of three (3) years each, excluding any pre-
ceding partial term ofless than three (3) years which such Director has served in filling a
"acancy; provided, however, that an individual shall be eligible for re-election to the Board of
Directors after a p~riod of one (1) year following expiration of such individual's fourth
consecutive tenn.
4.3.4 Initial Board. Notwithstanding anything to the contrary in this Article, the
tllnn of each Director serving at the effective date of these Bylaws shall be as stated in the Plan of
Consolidation; provided, however, that the provisions of these Bylaws regarding maximum terms
ofsenice shall include the consecutive years served by each Director as a director ofVeritus Inc,
or the Medical Service Association of Pennsylvania but only apply after each Director has served
one full three-year term as a Director of the Corporation.
4.4 Vacancies. Any vacancy in the Board of Directors caused by the death,
resignation or reml)val of a Director prior to the expiration of that Director's term and occurring
ill the interim bet\\een annual meetings of Members shall be filled by a majority vote of the
remaining Directors, taken at any regular or special meeting thereof. The Director so elected
shall.serve until the next annual meeting of the Members, at which time the vacancy so created
shall be filled for the remaining unexpired term, ifany, by election by the Members. Vacancies
shall be filled in such manner as to assure that the percentage of Lay Members as prescribed in
Section 4.2.3 of this Articte is maintained.
4.5 h:W,tines.
4,5.1 Annual Meetinl!~. The annual organizational meeting of the Board of
Directors for, among other purposes, the election of officers shall be held during the month of
A pril or May of eal:b year or at such other date, and at such time and place as the Board may
from time to time determine.
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4.5 2 RellUlar Meeti",ls. Regular meetings of the Board shall be held not less
than four times II year at such date, time and place as shall from time to time be detennined by
the Board, without further notice than the resolution seuing such date, time and place.
4.5 3 Special MeetlnllS. Special meetings of the Board may be called at any time
by the Chairpersoll of the Board, the Chief Executive Officer or by one.third (113) of the
nembers of the Bllard, at such date, time and place as may be designated In the notice calling for
t1e meeting. Noti.:e of any special meeting of the Board of Directors shall be given at lellSt forty.
eight (48) hours prior thereto by facsimile or overnight clllTier and shall slate the gcneral nature
c f the business to he transacted.
4.5.4 Adiournment. When II meeting of the Board is adjourned it shall not be
necessary to give any notice of the adjourned meeting or the business to be transacted at an
adjourned meeting other than by announcement at the meeting lit which such adjournment Is
tuken.
4.5.5 Ouorum. A ml\jority of the Directors then in office sball constitute a
quorum for the transaction of business at any meeting of the Board of Directors. Each Director,
including the Ex-Officio Director, shall be entitled to one vote on any matter submitted to n vote
of the Board of Directors. The acts approved by tbe affinnative vote ofa majority of the Dir.
e,;tors then in offic~ shall be the acts of the Board of Directors unless a greater proportion of
affinnative votes i~ required by applicable law, by the Articles of incorporation or by these
Bylaws.
4.5.'; Use of Conference Telephone. One Dr more persons may participate In iI
meeting of the Board of Directors Dr ofony Committee meeting by meons ofconference
telephone or similar communications equipment by means of which all persons participating In
the meeting con hear each other. Participation in a meeting in such manner shull constitute
presence in person at the meeting.
4.6 Res;gnationIRemovlll.
4.6.1 ResiRnation. Any Director may resign office at any time, snch resignation
to be made in writiJlg and to take effect upon the time stated in snch writing.
4.6.:! Effect of ReD cat cd Absences from Meetintls. If a Director shllll be absent
fNm four consecutive meetings of the Board of Directors, inCluding Regular Meetings and
Special Meetings duly called, the Board of Directors may, in its discretion, declare \lIe office of
s\.lch Director vacated and a successor shall be elected as provided in these Bylaws.
4.6.:; Removal. Any member of the Board of Directors may be removed for 1I11Y
proper cause, which may include the incapacity of the Director or a connlct of interest which the
Bllard determines tll be materially adverse to the Corpomtion, by a two-thirds (213) vote \lfthe
.7.
Directors then in nffice taken at any Regular or Special Meeting, provided that each Director has
been given ten days written notice that such action is to be considel'Cd at the meeting involved.
4.7 !d!,f\f1ict of Interest.
4.7.1 Any duality of interest or possible conflict of interest on thc part ofa
Director shall be disclosed by such Director to the Board of Directors and made a matter of
record.
4.7 2 Any Director having a duality of interest or possible conflict of interest on
a matter shall not vote or use his or her personal influence on such matter. Such Director may,
however, be count~d in determining a quorum for L;e meeting at which the matter is voted upon.
4.8 Limitation ofLiabilitv. Directors shall not be personally liable for monetary
damages as such filr any action taken, or any failure to take any action, WIless (a) the Director has
l:reached or failed to perform the duties of the Director's office as set forth under the Nonprofit
Corporation Law of 1988, as amended; and (b) the breach or failure to perform constitutes self.
dealing, willful misconduct or recklessness. The provisions of this paragraph shall not apply to
(:<) the responsibility or liability of a Director pW'Suant to any criminal statutej or (y) the liability
of a Director for the payment of taxes pursuant to local, state or federal law. Any repeal or
modification of this Section shall be prospective only, and shall not affect, to the detriment of
any Director, any limitation on the personal liability of a Director of the Corpomtion e'tisting at
the time of such repeal or modification.
ARTICLE V
Officers
5.1 Officers Generally: Election. The principal officers of the Corpomtion shall be a
Chairperson of the Board, a Chief E'tccutive Officer, a President, one or more Executive, Senior
and Corporate Vice Presidents, a Treasurer, a Secretary, and such other officers as may be desig-
nuted by the Board of Directors, including, but not limited to, a Vice Chairperson of the Board of
Directors and one or more Assistant Treasurers and Assistant Secretaries, all of whom shall be
elected by the Board of Directors. All such officers shall hold office for a term of one year (or
such other term as lhe Board shaH determine for any office from time to time) or until their
successors have qualified and are elected.
5.1.1 Chairperson of the Board. Only members of the Board of Directors shall
b(: qualified to be elected to the office of Chairperson of the Board, provided that the Chairperson
shall not be an employee of the Corpomtion. The Chaixperson of the Board shall have general
supervision over thu carrying out oCthe policies adopted or approved by the Board. The Chair-
person shall preside: at all meetings of the Members, of the Board of Directors and of the Execu-
tive Committee, anll, in general, shall perform all duties incident to the office of the Chairperson
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.........,.,.
of the Board and :lUch other duties as may be prescribed by the Board from time to time. The
ChaiJperson ofth.: Board shall have power to can meetings of the Members, of the Board of
Directors and of the Executive Committee.
5.) .2 Vice Chairoerson of the Board, Only memben of the Bourd of Directors
:ihall be qualified to be elected to the office of Vice Chailperson of the Bonrd. TIIIl Vice Chair-
person shall penonn all the duties of the Office of the Chairperson of We Bow in the absence of
the ChailpctSon of the Board, and such other duties as may be prescribed by the Board of
Directors from time to time.
5.1.3 ChiefExeeunve Officer. The Chief Executive Officer shall be responsible
lor the general anLl active management of the business and affairs of the Corporation and have
Heneral supervision of and authority over all of Its agenu and employees, TIle Chief Executive
l)ffieer shall supervise the implementation of all policies, orders nnd resolutions of the Bonrd of
Directors and shall execute all contracts and agreements authorized by the BClftrd excopt that he
or she may delegate to certain officers of the Corporation the power to oxecute contracts in the
(Irdinlll)' course of business or as authorized by the Board ofDireclOl'll. The Chief Executive
Officer shall have additional powers and duties as may be conferred by the Board of Directors.
5.1.4 President. The President shall be responsible for tho direct administration,
supervision and ct'ntrol of such activities in the management of the Corporation os shan be
assigned to him b} the Chief Executive Officer or by the Board of Directors,
5.1.5 Vice Presidents. Each Vice President shall penonn such duties as from
tome to time maybe assigned by the Chief Executive Officer or by tile BOllrd of Directors.
5.1.6 Treasurer. The Treasurer shall, in eccordlUlce with the policies of the
Board and under the direction of the Chief Executivc Officer or an officer desilPllIted by the
Board as the Corporation's Chief Financial Officer, have geneml charge lIud custody of and be
msponsible for all funds lUId securities of the COlponltion, llJ1d muke such reports in such fonn
and manner as the ChiefFinancia! Officer, the Chief Executive Officer or the Board may direct.
lhe Treasurer shall receive and give receipts for monies due nod Pllyable 10 the Corporation lUId
deposit such monit.s in the name of the Corporation in such banks, truSt complUlies or other
d~positories as may be selected in accordlUlce with the pruvlsions of these bylaws. The Treasurer
shall keep account of such receipts and deposits nod upprove expenditures of the Corporation
al1d, in general, sholl penonn rill the duties incident to the Office of Treasurer and such other
duties as may from time to time be assi(llled by the Chief Financial Officer, Ihe Chief Executive
Officer or the Board of Directors.
5.1.7 Secretan'o TIle Secretary shall keep Ihe minutes of the meetings of the
Members, the Board of Directors nnd of the Executive Committee in one or more books provided
f(lf that purpose, shall notify Members of the Corporation and the Board of Directors of their
election, shall see that all notices are duly lllven in IIccordance with the provisions of these
Bylaws, be custodian of tile corporate records and of the sea! for the Corporation, and see that the
.9.
seal for the COlp<lration is affixed to all instruments and docwnents, the execution of which has
been authorized ~y the Board of Directors or the Executive Committee, shall keep a record of the
post office address of each Member, Director and member of the Executive Committee, and in
general shall perfilnn all duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him or her by the Chief Executive Officer or by the Board of
Directors. In the absence of the Secretary or in the event of his or her inability to act, the Chair.
person of the Board shall appoint an individual to discharge the duties of the Secretary.
5.1.8 Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries
olIld Assistant Treasurers shall perfonn such duties as from time to time shall be assigned to they
by the Secretary or the Treasurer, respectively, or by the Chief Executive Officer or by the Board
l,fDirectors,
5.1.9 Other Officers. The Chief Executive Officer may, from time to time,
nppoint other officers or agents of the Corporation who shall hold their offices subject to the
discretion of the C'hiefExecutive Officer.
5.2 ~~. The Board of Direclors may require any officer to give bond and security
in such sum and \lith such surety or sureties as the Board may, from time to time, detennine.
ARTICLE VI
Committees
All committees shall have charters governing their powers and duties, which shall be
approved by the Bl)ard.
6.1 Slandimr Committees. The Board may, by resolution, adopted by a majority of
the Directors then in office, establish such standing committees of the Board (and, except as
otherwise provided herein, in each case appoint the members and the chairperson thereof based
upon the recommendation of the Chairperson of the Board) as it deems necessary or desirable
("Standing Committees").
6.1.1 Classification of Standim>: Committees. There shall be three categories of
Standing Committ<les . Governance Committees, Program Committees, and Review Committees.
6.1.2 Governance Committees. The Board may, by resolution, establish such
cl)Jnrnittees of the Board involved in the Corporation's governance as it deems necessary or
desirable ("Governance Committees"), including, without limitation, the Executive Committee,
Nominating Committee, Audit Committee, Investment Committee, Affmnative Action
Committee, and PersoMel and Compensation Committee. All Governance Committees shalt be
comprised ofDireetors of the Corporation. The Board shall delegate such authority to a
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Governance Committee as it deems appropriate and desirable IlIld is not prohibited by applicable
:aw. Each GOVemllIlce Committee IlIld its members shall selVe at the Board's discretion.
6.1.3 Prollram Committees, The Board may, by resolution, establish such
c'lmmittees of the Board involved in cenain program aspects of the Corporation's operations as it
d~ems necessary or desirable ("Program Committees"), including, without limitation, the Medical
A ffairs Committee. Dentat Affairs Committee and Quality Improvement Committee. The Board
shall delegate such authority to a Program Committee as it deems appropriate IlIld desirable and is
nolt prohibited by applicable law. The Board shall establish the manner of selecting members and
tenns of office of each Committee.
6.2 Review Committees. There shall be Review Committees established for the
I'wpose of adjudicating disputes relating to professional health services, as required by Section
6324(c) of the Blue Shield Act, including, without limitation, the Medical Review Committee
and the Dental Review Committee. The Review Committees shall operate independently of the
Corporation, IlIld the Board of Directors shall have no authority over the Review Committees
Nher than to assure that appointments arc timely made in accordance with these Bylaws and
adequate suppoJt services arc provided to the Committees at the Corporation's expense.
6.3 Re\'iew Committee Selection Committee, The Review Committee Selection
Committee shall cllDsist of at least five (5) members, a majority of whom shall be Professional
Members of the Curporation, IlIld the balance of whom shall be Lay Members. No member of
the Review Committee Selection Committee shall be a Director. The Review Committee
Selection Commitlee shall be responsible for the appointment and removal of members of the
F.eview CommittellS established under Article IX of these Bylaws.
6.4 SDeciel Committees. The Board mey, by resolution, establish one or more Special
Committees which, and whose members, selVe at the discretion of the Board, to advise the Board
IInd to perfonn oth~r functions as the Board detennines ("Special Committees").
6.5 Ten!!. Each member of a Standing Committee shall continue as such until the
n.;xt annual organil'..ationel meeting of the Board of Directors and until a SUccessor has been
appointed as provided in these Bylaws, unless sooner removed or unless such Committee is
dissolved by the Buard.
6.6 Quorum. Except as otherwise provided in these Bylaws, one-third (1/3) of the
members comprising any committee under this Article shall be necessary to constitute a quorum
fer the transaction of any business, and the acts of the majority oCthe committee members
present at any meeting at which a quorum is present shall be the acts of such committee, unless a
greatcr proportion is required by applicable law or by these Bylaws; provided that if all the
members severally or collectively consent in writing to any action to be taken, such action shal1
be lIS valid lIS though it had been authorized at II meeting of the committee.
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, .
6.7 Vacancies and Removal. Vacancies in membership orany committee may be
lilled by appointments made in the same manner as provided in the case of the original
.Ippointments. Except as otherwise provided in these Bylaws. any member of a committee may
he removed at an)' time by the Board of Directors, with or without cause.
ARTICLE vn
Governance Committees
7.1 EXllcutive Committee.
7.1.1 The Executive Committee shall consist of at least seven (7) but not more
than twelve (12) Directors, inclUding the Chairperson of the Board, the Vice Chairperson of the
Board, if any, and the Chief Executive Officer. The Chairperson of the Board, the Vice
Chairperson of the Board and the Chief Executive Officer shall be members of the Executive
Committee with the right to vote so long as each such person holds such office.
7.1.2 The Executive Committee shall have and exercise the authority of the
Eloard of Directors when the Board is Dot in session, excepting s14ch powers as may by law, the
Articles of IncorpClration, or these Bylaws, be requited to be exercised by the Board and further
excepting such powers as the Board may expressly reserve for itself. In the absence of the
Chairperson of the Board, the Vice Chairperson of the Board shall preside at meetings of the
Executive Committee and in the event of the Vice Chairperson's inability or refusal to act, the
C'hiefExecutive Officer shall act BS such Chairperson.
7.1.3 No less than seventy-five (75) percent, or as close as practicable thereto, of
the total authorized number of Directors serving on the Executive Committee shall be Duectors
who arc Lay Memhers of the Corporation. The remainder of the total number of Directors
s.:rving on the Executive Committee shall be Professional Members, provided, however, that the
Chairperson of the Board, the Vice Chairperson and the Chief Executive Officer shall be counted
in arriving at the number of members of the Executive Committee who shall be Lay Members
and the number who shall be Professional Members, as the CBS: may be.
7.1.4 A majority of the members of the Executive Committee then in office shall
constitute a quorum for the transaction ofbusincss, and the acts of a majority of the members of
the Executive Committee shall be the aclS of the Executive Committee.
7.l.:i Meetings of the Executive Committee may be called at any time by the
Chairperson of the Bow. by the Chief Executive Officer, or by any two members of the Com-
mittee. Notice of any special meeting of the Executive Committcc shall be given at least forty-
eight (48) hours prior thereto by facsimile or overnight carrier and shall state the general nature
ofthe business to be transacted.
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. .
7.1.6 The Executive COnunittee shall keep regular minutes of its proceedings
and report the sanle to the Board at its next regular meeting, or when otherwise required.
7.2 llilminlltine Committee.
7.2.1 Tbe Nominating Committee shall consist ofat least eight (8) Directors, at
. east six (6) of whom are Lay Members and two (2) of whom are Professional Members of the
Corporation.
7.2,2 The Nominating Committee shall be responsible for:
(a) Recommending to the Members the candiclates for election or reo
(:lection to the Board at each Annual Meeting of Members.
(b) Recommending to the Board the candidates for election by the
Board to fill vacaJIcies occurring on the Board.
(c) Recommending to the Members the candiclates for election or re-
election as Memb<.TS at each Annual Meeting of Members,
7.2.3 The Nominating Committee shall, at least fifteen (15) days before each
annual, regular or :Ipecial meeting of the Members and Directors, as appropriate, nominate the
r~quisite number of individuals who satisfy the qualifications ~tablished in these Bylaws for
election to fill such vacancies as there are to be f1lled at such meetings.
7.2,4 A majority of the members of the Nominating Committee then in office
shall constitute a quorwn for the transaction of business, and the acts of a majority of the
members present at a meeting at which a quorum is present shall be the acts of the Committee.
7.2.5 Certain Other Considerations. In considering persons eligible to serve as
Members, the Nominating Committee shall give due consideration to whether the follOwing
criteria will be sati~iied by the Membership taken as a whole, assuming the nominees iU1: elected
to the Membership.
(a) No more than fifty (50) percent of the Members or the Members'
spouses derive sub:rtantial income from the administration or delivery of health care; and
(b) At least fifty (50) percent of the Members are subscribers under a
contract issued by the Corporation.
In considering persllns eligible to selVe as Directors, the Nominating Committee shall ensure that
the aforementioned criteria will be satisfied by the Board of Directors taken as a whole, assuming
the nominees are elected to the Board.
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.'
, .~
ARTICLE VUI
Prol!Tam Committees
8.1 Medical Affairs Committee. The Medical Affairs Committee shall consist oCat
least ten (10) members, each of whom shall be appointed by the Chairperson of the Board of
Directors. A majclrity of the members of the Medical Affairs Committee shall be Participating
Providers, Preferred Providers or Network Providers of the Corporation. The Medical Affairs
Committee shall consider matters referred to it by the Board or by corpomte management, and
recommend appropriate action to the Board.
8.2 Delllal Affairs Committee. The Dental Affairs Committee shall consist of at least
ten (10) members, each of whom shall be appointed by the Chairperson of the Board of
Directors. A majc.rlty of the members of the Dental Affairs Committee shall be dentists who are
Participating ProViders, Preferred Providers or Network Providers of the Corpomtion. The Dental
Affairs CommittCl! shall consider matters referred to it by the Board or by corporate management
~J1d recommend appropriate action to the Board.
8.3 Qy;llltv Imnrovement Committee. The Quality Improvement Committee shalI
consist of at least len (10) members, each of whom shall serve until his or her successor is
appointed. The m~mbers of the Quality Improvement Committee shall be health service doctors
as defined in the Blue Shield Act and other professionals who meet the criteria as may be
established, from time to time, by the Board of Directors as it deems necessary or advisable. The
Quality Improvem~nt Committee shall consider matters referred to it by the Board of Directors or
by the officers of the Corporation and after study recommend appropriate action to the Board.
ARTICLE IX
Review Committees
9.1 ~,ute Resolution. All matters, disputes or controversies arising out of the
rc:lationship between the Corporation and professional health care providers who render health
s.:rvices to the Corporation's subscribers. including any questions illvolving professional ethics,
shalI be considered and determined by the appropriate one of the Review Committees established
under this Article, whose decision shalI be final on all such matters and controversies.
9.2 hWlical Review Committee. There shall be a Medical Review Committee
consisting of at leait eight (8) members. A majority of the members of the Medical Review
Committee shall be Providers who are Participating Providers or Preferred Providers with the
Corporation ("Provider Members"). and the balance shall be consumers covered under health
-14-
care contracts isslled by the Corporation ("Consumer Members"). At least three fourths of the
Provider Members of the Committee shall be Medical Doctors or Doctors of Osteopathy.
9.3 llintal Review Committee. There shall be a Dental Review Committee consisting
of at least eight (~) members. A majority of the members of the Dental Review Committee shall
be dentists who are Participating Providers or Prefcncd Providers with the Corporation
;"Provider Members"), and the balance shall be consumers covered under health care contracts
Issued by the Corporation ("Consumer Members").
9.4 Selection of Review Committee Members. Members of the Review Committees
:ihalJ be appointed by the Review Committee Selection Committee appointed pursuant to Section
6.3 of these Bylaws. Any person may submit the names of prospective Provider Members or
Consumer Members to the Selection Committee for consideration. The Selection Committee
:;haI1 make appointments to the Review Committees using the following criteria:
9.41 All Provider members shall be Participating Providers or Preferred
Providers of the Corporation.
9.42 No member shall be a Director of the Corporation.
9.4.3 At least two thirds of the members of any Review Committee shall have
110 relationship with the Corporation (other than as providers who submit claims in the ordinary
course of business or subscribers covered under one of the Corporation's health care programs).
9.4.4 No member of any Review Committee shall have any conflict of interest
that would prevent him or her from rendering a fair and impartial decision in any dispute between
lne Corporation 3tld its health care providers.
9.4.5 The Provider Members shall have no history of utilization problems with
the Corporation.
9.4.6 The Provider Members of the Medical Review Committee shall be broadly
r..:presentative of the various health care professions and specialties whose services arc covered
by the Corporation. and the Provider Members of the Dental Review Committee shall be broadly
rc:presentative of d~ntal specialties.
9.4.7 Members of any Review Committee must be willing to commit to regular
attendance at Committee meetings and to devoting adequate time to Committee business to
p.:rmit them to fully understand the Committee's work and give full and fair consideration to all
matters coming before the Committee. Failure to regularly attend meetings and devote adequate
attention to Committee work shall be cause for dismissal.
-15-
.
.
Members \lfthe Review Committees shall be appointed for tenns of two (2) years and
:,hnll be subject to dismissal during their terms only for cause as detennined by the Selection
Committee.
9.5 Qi11cers of Review Committees. Each Review Committee shall have three
llfficcrs: a Chairpl:rson, II Vice-Chairperson and a SecrelllIy, selected as follows:
9.5.1 The Selection Committee shall appoint a Chairperson for each Review
Committee. The Chairperson shall preside at all meetings of the Committee, but shall not vote in
r.ny matter being considered by the Committee except when necessary to break a tie.
9.52 The Selection Committee shall appoint a Vice-Chairperson for each,
Review Committee. The Vice-Chahperson shall preside at meetings of the Committee in the
Chairperson's abs\Jnce and, when serving in such capacity, shall only vote when necessary to
break a tie, The Vice-Chairperson shall also perfonn such other duties as the Chairperson shall
assign.
9.5.3 The Corporation shall provide one ofils employees to serve as Secretary
for each Review Committee. The Secretary's role shall be solely that of administrator, and not
that of a member of the Committee. The Secretary shall keep the minutes of the Committee, and
shall perfonn the duties enumerated in Section 9.8 of this Article, and such other duties as the .
C'ommittee shall ll:lsign.
9.6 fu!!lmission of Matters to the Review Committee. Matters may be submitted to a
R.eview Committee by corporate management or by any Participating Provider or Preferred
Provider. All matters to be submitted to a Review Committee shall be set forth in writing and
delivered to the Se~relllIy of the Review Committee involved.
9.7 Review Committee Proceedinl!s.
9.7.1 The Review Committees shall maintain written procedural guidelines to
a:isure that all Pro\'iders receive full and fair consideration of any issues presented to the
Committees.
9.7.2 Only the Provider Members of a Review Committee shall vote on any
matter brought befure it.
9.7.:1 In considering any matter brought before it, a Review Committee shall
have authority to take anyone or more of the following actions:
ac'tion.
(a) Refer the matter to the other Review Committee for appropriate
-16-
"
.'
9.8 ~Iceedinl!s Involvinl! SlallL' oran IndividuoJ as a Partlcioating Provid~r. The
procedures set forth In this section apply In oJI cases where the Committee has directed that a
hearing be hcld to determine the slatus of an individual as a Participating Provider of the
I:orporation. In all such cases. the Corpomtion shaH prepare an appropriate Complaint setting
rorth the allegatiollS against the individual. The Chairperson of the Review Committee shall
promptly fix II time, date and place for 11 hearing, The Provider involved shall be given at least
flfteen (1 S) days written notice by the Secretary of the Committee of the date, time and place of
liuch hearing, and shoJI be furnished with a copy of the Complaint. The Provider shoJI be allowed
10 file a written Answer to the Complaint, provided sueh Answer is filed with the Secretary of the
Committee at least five (5) days prior to the hearing. At the hearing, such witnesses may be
heard and such evidence may be received as is deemed to be relevant and of reasonable probative
value; provided, however, that formal roles of evidence need not be followed. The Provider
rJfected by the Complaint shall be afforded a reasonable opportunity to be heard before the
Committee, either in person or by counsel, and to produce evidence and witnesses at such
hearing. All testimony shall be recorded and a complete record shoJI be kept of the hearing.
After the h.:aring, the Review Committee, by majority vote of those members who are
Providers, shall take whatever action it deems appropriate, based on the evidence and testimony
produced at the he.U'ing and, if such action involves either the denial of registration as a
Participating Providcr. or suspension or termination of that provider's enrollment, the matter shall
I:e promptly referred to the Secretary of Health of the Commonwealth of Pennsylvania for
approval or for such other action as the SecretBI)' of Health may deem appropriate.
9.9 fmlerred Provider ADDeals. The Review Committees shall also serve as the fmal
appeal for Providers who are rejected or terminated as Preferred Providers by any PrefelTed
Provider panel operated by the Corporation under Pennsylvania's preferred provider legislation
(,10 P.S. ~ 764a) or any successor legislation. Any Provider who is rejected as a panel member or
whose status lIS a panel member has been terminated by the credentialing committee of any such
panel may appeal ill writing to the secretBI)' of the appropriate Review Committee. The Provider
in such appeals shall be entitled to appear before the Review Committee and present evidence or
argument, but the hearing need not be recorded and the Conunittee's decision need not be
wferred to the Secretary of Health for approval. The decision of the Review Committee on all
such appeals shall be final.
.18.
8.2 1!111181 ACfairs Committee. The Dental Affairs Committee shall consist ofatlellSt
len (10) memb~rs. each of whom shall be Dooointed bv the CllldrDerson of the Board oC
D(rector~ (serve until his or her successor Is appointed]. A majority of the members of the
Dental Affairs Committee shall be dentists who arc Participating Providers, PreCerred
Providers or j\;etwork Providers of the Corporation. The Dental Affairs Committee shall
consider matters referred to it by the Board or bv corDorate manD!!ement. (or by tbe officers
of thc Corporalionl, and recommend appropriate action to the Board.
ARTICLE IX
Review Committees
Article IX ofth~ Bylaws shall be amended and restated in its entirety as follows:
9.1 Disllute Resolution. All matters, disputes or controversies arising out of the
relationship between the Corporation and professional health care providers who render health
services to the Corporation's subscribers, including any questions involving professional ethics,
shall be considered and determined by the appropriate one of the Review Committees established
under this Article, whose decision shall be final on all such matters and contr~versies.
9.2 M!!lical Review Committee. There shall be a Medical Review Committee
consisting of at least eight (8) members. A majority of the members of the Medical Review
Committee shall be Providers who are Participating Providers or Preferred Providers with the
Corporation ("Provider Members"), and the balance shall be consumers covered under health
care contracts issued by the Corporation ("Consumer Members"). At least three fourths of the
Provider Memb.:rs of the Committee shall be Medical Doctors or Doctors of Osteopathy,
9.3 lli!!tal Review Committee. There shall be a Dental Review Committee consisting
of at least eight (8) members. A majority of the members of the Dental Review Committee shall
be dentists who are Panicipating Providers or Preferred Providers with the Corporation
("Provider Members"), and the balance shall be Consumers covered under health care contracts
issued by the Corporation C"Conswner Members").
9.4 ~ctlon of Review Committee Members. Members of the Review Committees
shall be appointed by the Review Committee Selection Conunittee appointed pursuant to Section
6.3 of these Bylaws. Any person may submit the names of prospective Provider Members or
Consumer Members to the Selection Committee for consideration. The Selection Committee
shall make appointments to the Review Committees using the follOwing criteria:
9.4.1 All Provider members shall be Participating Providers or Preferred
Provider~ of the Corporation.
-3-
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9.4,2 No member shall be II Director of the Corporation,
9.4.3 At ICllSt two thirds of the members of any Review Committee shalt have no
relatioruhip with the Corporation (other than lIS providers who submit claims in the
ordinary course of business or subscribers covered IU1der one of the Corpol'lltion's health
care programs).
9.4.4 No member of any Review Comminee shall have lIllY conflict of interest
that would prevent him or her from rendering II fair and impartial decision in lIllY diSpute
between the Corporation and its helllth cllre providers.
9.4.5 The Providcr Members shall have no history of utilization problems ....;th
the Corporation.
9,4.6 The Provider Members of the Medical Review Committee shall be broadlv
.
represemative of the various health care professions and specialties whose services are
covered by the Corporation.lIlld the Provider Members of the Dental Review Committee
shall be I,roadly representative of dental specialties.
9.4.7 Members of any Review Committee must be willing to commit to regular
attendan.:e at Committee meetings and to devoting adequate time to Committee business
to permit them to fully understand the Committee's work and give fulllllld fair
consideration to all matters coming before the Committee. Failure to regularly attend
meeting~ and devote adequate attention to Committee work shall be cause for dismissal.
Member.; of the Review Committees shall be appointed for terms of two (2) years and
shall be subject to dismissal during their terms only for cause as determined by the Selection
Committee.
9.5 Officers of Review Committees. Each Review Committee shall have three
officers: II Chairperson, a Vice-Chairperson lIlld a Secretary, selected as follows:
9.5.1 The Selection Committee shall appoint a ChaiIperson for each Review
Committee. The Chairperson shall preside at all meetings of the Committee, but shall not
vote in any matter being considered by the Committee except when necessary to break a
tie.
9.5.2 The Selection Committee shall appoint a Vice-Chairperson for each Review
Committee. The Vice-Chairperson shall preside at meetings of the Committee in the
Chairper.;on's absence and, when serving in such capacity, shall only vote when
necessary to break a tie. The Vice Chairperson shall also perform such other duties as !he
ChaiIperson shall assign.
.4-
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(0 Render a finding that authorizes the Corporation to collect any refund by
withholding future payments due from the Corporation 10 the Provider
involved.
(g) Render such decision or take any other such action as may be necessary or
appropriate to fully resolve any dispule presented to the Comminee.
9.7.4 Ifa particular matter involves conduct which wouldjustify denying a
Providl!r enrollment as a Participating Provider of the COrporation under the Blue Shield
Act, or tennination of the individual's enrollment, the Committee may direcl that a
hearing be held in accordance with Section 9.8 of this Article to consider the Provider's
Participating status. Such conduct may include:
(a) Violation of the Provider's Agreement with the Corporation:
(b) Violation of the regulatory legislation applicable to the Corporation;
Ie) Violation of the Regulations for Participating Providers of the
Corporation;
Id) Refusal to adhere to the billing, payment, or service benefit provisions of
any health plan in which the Participating PrOvider participates; or
(e) Violation of Federal or State criminal statutes.
9.8 fmceedi 5 lnvo vin" S tus an lnd.....dual ani otin P ovider. The
procedures set forth in this section apply in all cases where the Committee has directed that a
hearing be held 10 delennine the status ofan individual as a Participating Provider of the
Corporation. In all such cases, the Corporation shall prepare an appropriate Complaint setting
forth the allegations against the individual. The Chairperson of the Review Committee sball
promptly fix a time, date and place for a hearing. The Provider involved shall be given at least
fifteen (15) days written notice by the Secretary of the Committee of the date, time and place of
su~h hearing, and shall be furnished with a copy of the Complaint. The Provider shall be
allowed to file a wrinen Answer to the Complaint, provided such Answer is filed with the
Secretary of the Committee at least five (5) days prior to the hearing. At the hearing, such
witnesses may b.: heard and such evidence may be received as is deemed to be relevant and of
reasonable probative value; provided, however, that fonnal rules of evidence need not be
followed. The Provider affected by the Complaint shall be afforded a reasonable oppottunity to
be heard before the Committee, either in person or by counsel, and to produce evidence and
witnesses at such hearing. All testimony shall be recorded and a complete record shall be kept of
the hearing.
.6-
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D.C. . CIVIL ACTION - LAW
.
Plaintiff .
.
. No. : 97-2288 CIVIL
.
v. .
.
JURY TRIAL DEMANDED
HIGHHARK, INC., d/b/a :
PENNSYLVANIA BLUE SHIELD, :
Defendant
Answer thereof, the Reply to New Matter, it is hel)~ ordered that:
1. Depositions shall be completed within~ days of this
/t-..t. W~ "" ~ t
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ORDER
AND NOW, this
consideration of Petition to Vacate
date;
CoUt\ft. (
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2.
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of
1999, upon
Award and the
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3. Notice of the Entry of this Order shall be provided to
all parties by the Petitioner.
BY THE COURT:
JUDGE
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The Law Offices of SPERO T. LAPPAS
205 State Street
Post Office Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
By: SPERO T. LAPPAS, Esquire
Pa. Supreme Court identification no. 25745
ATTORNEY FOR THE PLAINTIFF
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D.C. : CIVIL ACTION - LAW
Plaintiff :
: No. 97-2288
v. :
: JURY TRIAL DEMANDED
HIGHMARK, INC., d/b/a
PENNSYLVANIA BLUE SHIELD, :
Defendant :
NOTICE TO TAKE
RECORDS DEPOSITION
TO: HIGHMARK CORPORATION, and
JOHN DUBS, and
BRIDGET MONTGOMERY, ESQUIRE
1. PLEASE TAKE NOTICE that pursuant to the Rules of Civil
Procedure the following depositions upon oral examination will be
taken by the PLAINTIFF, for the purposes of discovery and/or use at
trial, before a Notary Public or other person authorized to
administer oaths, on all matters not privileged which are relevant
and material to the issues and subject matter involved in the above
action; and the witnesses are directed to appear at the designed
time and place and submit to examination under oath.
2.
WITNESS:
CUstodian of Records,
HIGHMARK CORP.
PLACE OF DEPOSITION:
205 State Street
Harrisburg, Pennsylvania 17101
OCTOBER 10, 1999
9:00 AM
DATE OF DEPOSITION:
TIME OF DEPOSITION:
WITNESS:
JOHN DUBS
The Law Offices of SPERO T. LAPPAS
J
PLAINTIFF'S
EXHIBIT
A
Page 1
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LESLIE WENRICH, D.C.,
Plaintiff
v.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
HIGHMARK, INC., d/b/a
PENNSYLVANIA BLUE SHIELD,
Defendant
NO. 97-2288 CIVIL TERM
ORDER OF COURT
AND NOW, this 17th day of February, 2000, upon
consideration of Plaintiff's Motion To Compel Discovery and
Plaintiff's Praecipe To Attach, and following a discovery
conference held in the chambers of the undersigned judge in
which Plaintiff was represented by Spero T. Lappas, Esquire, and
Defendant was represented by Michael J. Burns, Esquire, and
Barbara Schmuck, Esquire, it is ordered and directed as follows:
1. Within thirty days of today's date,
Defendant shall respond with an answer to Plaintiff's
interrogatory reading as follows: "With respect to each member
of the medical review committee as of May 4, 1999, [provide], ,an
. - ~
accounting of any remuneration, costs, payments, money or-otner
things of value which each such member received directly or
indirectly from or on account of Highmark or any of its ~embers,
officers, directors, agents, subsidiaries or parts, or
".1
predecessors"; provided, that the accounting need not date back
more than five years from May 4, 1999.
2. Defendant shall define the term "member of
[the] corporation" as the term is used in the bylaws of
Defendant and shall identify any and all benefits which can or
may accrue to a member of the corporation by virtue of that
status.
3. Pursuant to an agreement of counsel, the
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remuneration each Medical Review Committee member received for providing madical care
and services to PBS subscribers.
13. Due to the sensitive nature of this personal income information, counsel for
PSS requested an agreement from plaintiff's counsel that the Information regarding this
remuneration be kept confidential and would be released to no other person or used for any
purpose other than the instant litigation. Counsel for PSS does not object to its production
and stands ready, willing and able to produce this information if a confidentiality agreement is
entered Into by plaintiff and his counsel.
14. Sy letter dated March 28, 2000, counsel for plaintiff advised PSS that he
would not agree to a confidentiality agreement with respect to the information regarding this
remuneration.
15. Plaintiff's counsel further restated his position during a telephone conversetion
with counsel for PSS on March 29, 2000.
16. Given the highly sensitive and confidential nature of the personal income
Information requested, defendant PSS is seeking the intervention of this Court to designate
this information as confidential and place it under seal in this litigation and that it not be
disclosed or used for any other purpose.
17. The position that plaintiff's counsel has adopted with respect to this
information is unreasonable, is completely lacking in legal support, and leads to the conclusion
that plaintiff's counsel is seeking this information for an inappropriate purpose.
WHEREFORE, defendant PSS respectfully requests this Honorable Court to enter an
appropriate Order keeping the requested information under seal, and further ordering that
all Information regarding remuneration received by members of the Medical Review
304716-1
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The Law offices of SPERO T. LAPPAS
205 State street
Post Office Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
By: SPERO T. LAPPAS, Esquire
Pa. Supreme Court identification no. 25745
ATTORNEY FOR THE PLAINTIFF
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D.C. . CIVIL ACTION - LAW
.
Plaintiff :
. No. : 97-2288 CIVIL
.
v. .
.
JURY TRIAL DEMANDED
PENNSYLVANIA BLUE SHIELD, .
.
Defendant
MOTION FOR SANCTIONS
1. On February 17, 200 the Court issued an Order requiring
the defense to turn over certain materials and information to the
Plaintiff no later than March 20, 2000. This Order was entered by
agreement of all counsel during chambers meeting with the Court.
2. On March 20, 2000, the defendant furnished information
which violated the Court's Order and which was, in the opinion of
Plaintiff's Counsel, not a good faith effort to comply with the
Court's Order. Specifically, while the Order required that the
Defendants furnish complete information concerning all monetary and
other benefits which the medical review committee members have
received over a period of the last five years, the defense provided
only partial and incomplete information limited to the honoraria
and expenses which these members receive for attending medical
The Law Offices of Spero T. Lappas
Page 2
review committee hearings. This violated both the letter and the
spirit of Plaintiff's discovery request, the Court's Order and the
Agreement of Counsel (See Exhibit "1" hereto).
J. Plaintiff's counsel communicated this failing to defense
counsel by telephone and then by letter and defense counsel agreed
to provide the necessary information.
4. However, because of a number of delays and requests for
extensions of time, the defendant's original production was late,
and the defendant's subsequent production has never occurred.
5. The stated reason for Defendant's failure to comply with
the Court's Order is that the Defendant now has decided
unilaterally to impose a new condition upon compliance with the
Order of Court: namely that the Plaintiff enter into some
undefined "confidentiality agreement" prior to receiving this
information.
6. The Defendants originally agreed to deliver this material
without any confidentiality, the Court's Order does not impose any
confidentiality agreement, and the conduct of the Defendant
throughout the Plaintiff's attempts to obtain discovery suggests
that the Defendant's present position is not taken in good faith.
7. Neither has the Defendant suggested any reason for
confidentiality being appropriate. The most anyone has said on
this issue is that defense counsel has now decided that the
information which they originally agreed to provide without
restriction has now become so "highly sensitive" that it could only
The Law Offices of Spero T. Lappas
Page J
v.
IN TilE COURT OF CO~1t.10N PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LMI
LESLIE ~1ENRICH, D.C.,
Plaintif f
HIGHMARK, INC., d/b/a
PENNSYLVANIA BLUE SHIELD,
Defendant
NO. 97-2288 CIVIL TERM
ORDER OF COURT
AND NOW, this 17th day of February, 2000, upon
consideration of Plaintiff's Motion To Compel Discovery and
Plaintiff's Praecipe To Attach, and following a discovery
conference held in the chambers of the undersigned judge in
which plaintiff was represented by Spero T. Lappas, Esquire, and
Defendant was represented by Michael J. Burns, Esquire, and
Barbara Schmuck, Esquire, it is ordered and directed as follows:
1. Within thirty days of today's date,
Defendant shall respond with an answer to Plaintiff's
interrogatory reading as follo\'ls: "l'lith respect to each member
of the medical revievl committee as of Hay 4, 1999, [provide] an
accounting of any remuneration, costs, payments, money or other
things of value which each such member received directly or
indirectly from or on account of Highmark or any of its members,
officers, directors, agents, subsidiaries or parts, or
predecessors"; provided, that the accounting need not date back
more than five years from May 4, 1999.
2. Defendant shall define the term "member of
[the] corpol'ation" as the term is used in the byla\'1S of
Defendant and nhall identify any and all benefits v:hich can or
m"y accrue to " l11(,mlwr of the corporation by virtue of that
EXHIBIT
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THE LA\'" OI'FICE5 OF SPERO T. LAPPA5
205 STATE STREET
POST OffiCE BOX 808
HARRISBURG. PENNSYLVANIA 17108'0808
~rERO T. LAPr~
A.'>:~": E. ARIAS'O
1.larch 28, 2000
AREA CODE 717
TlLErlIO~E 239'4286
r....~ 238'4826
VIA FAX (215-587-1699)
Michael J. Burns, Esquire
Christie, Paba rue , Mortensen, Young
1880 JFK Boulevard, 10th Floor
Philadelphia, PA 19103-7424
In re:
Wenrich v. Highmark, Inc.
Dear Michael:
I received your March 27, 2000 letter which was FAXed to me
after business hours at about 5:30 p.m. on that date.
As you will remember, last week I brought to your attention
the fact that your discovery SUbmissions were not in accordance
with Judge Oler's Order and did not appear to me to be a good faith
effort to comply with that Order. It was very clear when we spoke
in Judge Oler's Chambers that you were to provide information
concerning all monies received from the Medical Review Committee
Nembers--not just honoraria, expenses, etc. relating to their
medical review committee services. Specifically, we discussed the
fact that you would provide information concerning all monies which
the medical review committee members have received from lIighmark in
connection with medical services, payments of bills, invoiCing, and
the like for at least the last five years. You did not provide
this information, but I told you ~lhen ~le spoke that I would give
you 48 hours to do so before complaining to the Courts.
Now, on March 27, I receive a letter in which you indicate you
want another couple of days in order to determine, among other
things, whether or not the material which you have alrendy agreed
to provide, and which is now late, is "discovernble." You nlso
request, nnd I decline to provide you \-1ith, n confidcntinlity
ngreement. We will not sign n stipulntion.
As n mntter of profesnionnl courtesy, J will wait until 5:00
p.m. on '.larch 29, 2000. If by that time J do not hnve full and
complete anS\1(l}'S to the Court ordered interro~Jatories, I \1ill bring
the matter to Judge Oler's nttention on the f,lOrning of March 30,
2000 and seck sanctions.
sincerely,
. 1
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The Law offices of SPERO T. LAPPAS
205 state street
Post Office Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
By: SPERO T. LAPPAS, Esquire
Pa. Supreme Court identification no. 25745
ATTORNEY FOR THE PLAINTIFF
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D.C.
Plaintiff
CIVIL ACTION - LAW
No.: 97-2288 CIVIL
v.
PENNSYLVANIA BLUE SHIELD,
Defendant
JURY TRIAL DEMANDED
.
.
MOTION FOR SANCTIONS
1. On February 17, 200 the Court issued an Order requiring
the defense to turn over certain materials and information to the
Plaintiff no later than March 20, 2000. This Order was entered by
agreement of all counsel during chambers meeting with the Court.
2. On March 20, 2000, the defendant furnished information
which violated the Court's Order and which was, in the opinion of
Plaintiff's Counsel, not a good faith effort to comply with the
Court's Order. Specifically, while the Order required that the
Defendants furnish complete information concerning all monetary and
other benefits which the medical review committee members have
received over a period of the last five years, the defense provided
only partial and incomplete information limited to the honoraria
and expenses which these members receive for attending medical
The Law Offices of Spero T. Lappas
Page 2
review committee hearings. This violated both the letter and the
spirit of Plaintiff's discovery request, the Court's Order and the
Agreement of Counsel (See Exhibit "I" hereto).
3. Plaintiff's counsel communicated this failing to defense
counsel by telephone and then by letter and defense counsel agreed
to provide the necessary information.
4. However, because of a number of delays and requests for
extensions of time, the defendant's original production was late,
and the defendant's subsequent production has never occurred.
5. The stated reason for Defendant's failure to comply with
the Court's Order is that the Defendant now has decided
unilaterally to impose a new condition upon compliance with the
Order of Court: namely that the Plaintiff enter into some
undefined "confidentiality agreement" prior to receiving this
information.
6. The Defendants originally agreed to deliver this material
without any confidentiality, the Court's Order does not impose any
confidentiality agreement, and the conduct of the Defendant
throughout the Plaintiff's attempts to obtain discovery suggests
that the Defendant's present position is not taken in good faith.
7. Neither has the Defendant suggested any reason for
confidentiality being appropriate. The most anyone has said on
this issue is that defense counsel has now decided that the
information which they originally agreed to provide without
restriction has now become so "highly sensitive" that it could only
The Law Offices of Spero T. Lappas
Page 3
be produced under a promise of non-disclosure.
8. Defense Counsel agreed to provide this information, they
then failed to provide it, they were ordered by the Court to
provide it, they have attempted to shirk this responsibility by
providing partial, incomplete, and useless information, and now
that the Plaintiff is insisting on full compliance with the Court's
Order, defense counsel has imposed additional barriers to the
receipt of this information. (All recent correspondence between
counsel regarding this issue is attached hereto collectively as
Exhibit "2").
9. This conduct reflects bad faith. The Plaintiff requests
that the Court issue an order directing the Defendants to turn over
forthwith every single document and other piece of information
covered by the Court's previous Order. The Plaintiff also requests
counsel fees paid by the Defendant to Plaintiff's counsel on
account of the litigation of this motion for discovery.
RESPECTFULLY SUBMITTED,
~c s of SPERO T. LAPPAS
By:
S P ,Esquire
Pa. Supreme ct. ID no. 25745
205 State Street
P.O. Box 808
Harrisburg, PA l7108-0808
(717) 238-4286
ATTORNEYS FOR PLAINTIFF
The Law Offices of Spero T. Lappas
Page 4
v.
IN THE COURT OF COl4MON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LMl
LESLIE WENRICH, D.C.,
Plaintif f
HIGHMARK, INC., d/b/a
PENNSYLVANIA BLUE SHIELD,
Defendant
NO. 97-2288 CIVIL TERM
ORDER OF COURT
AND NOW, this 17th day of February, 2000, upon
consideration of Plaintiff's Motion To Compel Discovery and
Plaintiff1s Praecipe To Attach, and following a discovery
conference held in the chambers of the undersigned judge in
which plaintiff was represented by Spero T. Lappas, Esquire, and
Defendant was represented by Michael J. Burns, Esquire, and
Barbara Schmuck, Esquire, it is ordered and directed as follows:
1. Within thirty days of today's date,
Defendant shall respond with an answer to Plaintiff's
interrogatory reading as follows: "~lith respect to each member
of the medical review committee as of May 4, 1999, [provide] an
accounting of any remuneration, costs, payments, money or other
things of value which each such member received directly or
indirectly from or on account of Highmark or any of its members,
officers, directors, agents, subsidiaries or parts, or
predecessors"; provided, that the accounting need not date back
more than five years from May 4, 1999.
2. Defendant shall define the term "member of
[the] corporation" as the term is used in the bylal'ls of
Defendant and shall identify any and all benefits 11hich can or
may accrue to a member of the corporation by virtue of that
'",,'t~'!EXHIBIT'''~ "
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Pursuant to an agreement of counsel, the
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THE LAW OFFICES OF SPERO T. LAPPAS
205 STATE 5l'REf:T
POST OFFICE hOX 808
HARRISBURG, PENNSYLVANIA 17108,0808
~NRO T, LArr~
^NN E. ^RIANO
March 28, 2000
^REA COOt 717
TEUPHONE 238'4286
rAX 238'4826
VIA FAX (215-587-1699)
Michael J. Burns, Esquire
Christie, Pabarue, Mortensen, Young
1880 JFK Boulevard, loth Floor
Philadelphia, PA 19103-7424
In re:
Wenrich v. Highmark, Inc.
Dear Michael:
I received your March 27, 2000 letter which was FAXed to me
after business hours at about 5:30 p.m. on that date.
As you will remember, last week I brought to your attention
the fact that your discovery submissions were not in accordance
with Judge Oler's Order and did not appear to me to be a good faith
effort to comply with that Order. It was very clear when we spoke
in Judge Oler's Chambers that you were to provide information
concerning all monies received from the Medical Review Committee
Members--not just honoraria, expenses, etc. relating to their.
medical review committee services. Specifically, we discussed the
fact that you would provide information concerning all monies which
the medical review committee members have received from Highmark in
connection with medical services, payments of bills, invoicing, and
the like for at least the last five years. You did not provide
this information, but I told you when we spoke that I would give
you 48 hours to do so before complaining to the Courts.
Now, on March 27, I receive a letter in which you indicate you
want another couple of days in order to determine, among other
things, whether or not the material which you have already agreed
to provide, and which is now late, is "discoverable." You also
request, and I decline to provide you with, a confidentiality
agreement. We will not sign a stipulation.
As a matter of professional courtesy, 1 will wait until 5:00
p.m. on March 29, 2000. If by that time I do not have full and
complete answers to the Court ordered interrogatories, I will bring
the matter to Judge Oler's attention on the morning of March 30,
2000 and seek sanctions.
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PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted in duplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please list the within matter for the next Argument Court,
CAPTION OF CASE
(entire caption must be stated in full)
LESLIE WENRICH, D,C.,
(plaintiff)
vs.
mGHMARK, INC., dlb/d
PENNSYLVANIA BLUE SHIELD,
(Defendant)
No, 2288 Civil 1921-
1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to
complaint, etc.):
Defendant Highmark, Inc, 's Motion for SummaI)' Judgment
2. IdentifY counsel who will argue case:
(a) for plaintiff: Spero T. Lappas, Esq.
Address: 2080 Linglestown Road, Suite 201, Harrisburg, PA 17110
717-540-9170
(b) for defendant: Tara B. Dickennan, Esq.
Address: 1880 JFK Boulevard - 101h Floor, Philadelphia, PA 19103-7424
215-587-1650
3. I will notifY all parties in writing within two days that this case has been listed for
argument.
"'too [ ~G LeD2
4. Argument Court Date:
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process as required by the Participating Provider Agreement executed by plaintiff.
A copy of this order Is attached hereto as Exhibit "A."
4. On May 4, 1999, plaintiff and his attorney appeared for a hearing before
the defendant's Medical Review Committee to contest the decision of PBS to deny
payment for x-ray examinations performed.
5. On or about June 1, 1999, the Medical Review Committee Issued Its
decision dismissing plaintiff's claims and affirming Its prior determination.
6. Plaintiff subsequently tiled a Petition to Vacate, Set Aside, Modify and
Reverse the decision of the Medical Review Committee In the Court of Common Pleas
of Cumberland County. Simultaneously, with the tiling of his Petition on June 29,
1999, plaintiff initiated a second action at No. 99-4000 civil with the tiling of a
Complaint.
7. In this new Complaint, plaintiff alleges that defendant wrongfully
disapproved certain submitted bills for payment and informed plaintiff's patients that
the reason for nonpayment was because defendant had determined that plaintiff's
equipment was substandard. Plaintiff alleges that defendant's statements were false
and defamatory, and that plaintiff suffered damages Including Impairment of his
reputation, embarrassment, and mental anguish and was Injured in his business or
profession. See plaintiff's Complaint, attached hereto as Exhibit "B." Plaintiff also
alleges that the Medical Review Committee hearing was unfair, deprived plaintiff of
due process and was a result of fraud.
8. The pleadings have been closed and written discovery has been
exchanged. The depositions of plaintiff, Dr. Weinrich, and two members of the
:38347].(
2
14. The basic elements of procedural due process are adequate notice,
opportunity to be heard, and the chance to defend oneself before a fair and
Impartial tribunal. ~ Commonwealth v. Thomoson, 281 A.2d 856, 858 (Pa.
1971); ~ ~ Greenstein v. Commonwealth of Pennsvlvanla. Deoartment of
Health, 512 A.2d 739, 743 (pa. Cmwlth. Ct. 1986).
15. In the Instant case, plaintiff's due process rights were not violated by
the Medical Review Committee Hearing which was held on May 4, 1999. Plaintiff
received a fair and Impartial hearing and had the opportunity to be heard and
present his claim to the committee.
16. In the case of Rudoloh v. Pennsvlvanla Blue Shield, 717 A.2d 508 (pa.
1998), the Supreme Court of Pennsylvania set forth parameters for the
requirements of due process at a Medical Review Committee Hearing.
17. The Supreme Court determined that due process requires that a
person aggrieved by the award of a Medical Review Committee Is entitled to "a
judicial review for notice and the opportunity to be heard In an appropriate forum
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and for fraud and other misconduct. See Rudoloh, 717 A.2d at 510. Due process
also requires that the forum be fair and Impartial. Id.
18. In response to the Rudoloh decision, Pennsylvania Blue Shield
amended Its corporate bylaws to change the composition of the Medical Review
Committee ("MRC"), thus limiting the participation of Its employees. I As
reconstituted, the MRC now consists of only three PBS employees who are
considered corporate members and seven non-corporate members. A copy of the
'111e Supreme Court's decision in Rudolph was solely based on the composition of the committee, not on its
proeedural guidelines. The Superior Court of Pennsylvania in Rudolph v. PBS. 679 A.2d 805 (Pa. Super. 1996)
specifically found thai the procedures adopted by the committee were constitutionally adequate.
:383471-1
4
amended bylaws are attached hereto as Exhibit "C." These changes were
promulgated and In effect at the time of plaintiff's May 4, 1999 Medical Review
Committee Hearing.
19. At the time of plaintiff's hearing, the Medical Review Committee was In
compliance with the amended bylaws which require at least two thirds of the
Medical Review Committee members to have no corporate ties. ~ 9.4.3 of the
Amended Bylaws attached hereto as Exhibit "C."
20. In the Instant case, plaintiff's counsel took the depositions of Dr.
Robert Albertini and Dr. William Daiber. Both Dr. Albertini and Dr. Dalber were
members of the Medical Review Committee In 1999 and were present for plaintiff's
hearing. Both Dr. Dalber and Dr. Albertini denied that their relationship with
Pennsylvania Blue Shield Influenced or Impacted their decision on Dr. Weinrich's
claim.
21. Accordingly, there is no evidence that there was any bias among the
Medical Review Committee members who were present at plaintiff's hearing on May
4, 1999.2 To the contrary, the evidence illustrates that plaintiff, Dr. Weinrich,
received a fair and Impartial hearing.
22. In addition to the Medical Review Committee Hearing satisfying the
due process requirements of a fair and Impartial hearing, plaintiff also had adequate
notice of the hearing and the opportunity to be heard.
23. At plaintiff's deposition, Dr. Weinrich admitted that he received notice
of the Medical Review Committee Hearing. See Deposition of Dr. Weinrich, at p.
52, attached hereto as Exhibit "E." Both Dr. Weinrich and his attorney were
I At his deposition. plaintiff testified that he was unaware of the make up of the MRC. See Exhibit "E" at p. 56.
:383471-1
5
present at the hearing and had the opportunity to present their case, Including
submitting evidence to the committee. IQ. at pp. 54-55.
24. Applying the Rudoloh analysis to the present case, It Is clear that the
procedures followed by the Medical Review Committee were adequate to satisfy the
requirements of due process. Therefore, plaintiff's due process rights were not
violated since he had a full opportunity to be heard before a fair and Impartial
panel.
25. Accordingly, summary judgment should be granted in favor of
defendant, Pennsylvania Blue Shield.
C. THE MEDICAL REVIEW COMMITTEE WAS THE APPROPRIATE
FORUM TO HEAR PLAITNIFF'S CLAIM
26. Defendant Incorporates by reference paragraphs 1. through 2S herein
as through the same were set forth at length herein.
27. In the Instant case, plaintiff had a contract with PBS calling for the
resolution of disputes through the Medical Review Committee. Pialntiff signed a
Provider Agreement with PBS which required him to abide by all the terms of the
Agreement. A copy of the Agreement is attached hereto as Exhibit "H."
28. Pennsylvania Blue Shield's bylaws provide that all matters, disputes or
controversies arising out of the relationship between the corporation and
professional providers ....shall be considered, acted upon and disposed of and
determined by the appropriate one of the two Review Committees hereinafter
referred to. See Bylaws of PBS, Article X, 1 attached hereto as Exhibit "C."
Therefore, the Medical Review Committee has the exclusive authority to decide
disputes with participating providers, and therefore, was the appropriate forum to
decide plaintiff's claim.
:383471-1
6
29. Plaintiff understood that as a participating provider, he was required to
abide by the terms of the Agreement. Exhibit "E," at p. 15. As a participating
physician, Dr. Weinrich agreed to accept compensation for services rendered In
accordance with defendant's regulations and bylaws. See Exhibit "H."
D. THE MEDICAL REVIEW COMMITTEE'S DETERMINATION IS
BINDING AS A FINAL RULING AND PLAINTIFF IS NOT
ENTITLED TO JUDICIAL REVIEW
30. Defendant Incorporates by reference paragraphs 1 through 29 herein
as through the same were set forth at length herein.
31. The relationship between Dr. Weinrich and PBS Is governed by the
Professional Health Services Plan Corporation Act. See 40 Pa.C.S. ~6301 gJ; sea.
32. Section 6324(c) of the Act provides that disputes are to be considered
and determined only be health service doctors.
33. According to Pennsylvania case law, where a statutory remedy exists,
it Is the exclusive remedy unless the statute also preserves the jurisdiction of the
courts. See Pennsvlvanla Game Comm. v. Luzerne Cltv Tax Claim Bureau, 444
A.2d 783, 785 (pa. Cmwlth. Ct. 1982); see also Emeraencv Medical Associates Ltd.
V. Pennsvlvanla Blue Shield, 70 Delaware Rep. 538 (1983), aff'd 488 A.2d 1169
(pa. Super. 1984)(holdlng that the statutory language of "only by health service
doctors" found In 40 Pa.C.s. ~6324(c) was clear and unambiguous, and therefore,
is considered the exclusive remedy to hear disputes).
34. The Medical Review Committee's decision was appropriately based on
an evaluation of the quality of Dr. Weinrich's care. After reviewing the evidence
and asking questions regarding the quality of plaintiff's x-ray equipment, the MRC
determined that Dr. Weinrich was not engaging In acceptable quality of care and
:383471-1
7
breached his contractual obligations under the PBS participating provider
regulations. ~ Exhibit "0" at p. 8.
35. By failing to permit Blue Shield representatives to make reasonable
examinations of Dr. Weinrich's x-rays, Dr. Weinrich breached his contractual
obligations with PBS. See PBS regulations B9 and B15, attached hereto as Exhibit
"I. "
36. Pursuant to Regulations B9 and B15, PBS appropriately determined
that the x-ray equipment and services provided by Dr. Weinrich did not meet the
accepted standards of practice In the community.
37. The decision of the Medical Review Committee Is binding and may not
be reviewed by a trial court. See Rudoloh, 679 A.2d at 810 (citing 42 Pa.C.S
~7341).
38. There Is no evidence that Dr. Weinrich was denied a hearing, or that
the Medical Review Committee's determination was a result of fraud or misconduct
since the committee members did not constitute a biased panel.
39. Accordingly, pursuant to 42 Pa.C.S. !j7341, the decision of the Medical
Review Committee Is binding.
40. Plaintiff does not have any recourse to determine the merits of his
claim In state court since the Medical Review Committee Is the exclusive jurisdiction
for which his dispute may be heard.
41. Accordingly, summary judgment should be granted in favor of
defendant, Pennsylvania Blue Shield.
:383471-1
8
47. First, plaintiff has failed to set forth any concrete evidence that these
statements blackened his reputation In the community. At his deposition
testimony, plaintiff testified that, In response to receiving the EOB form, his
patients blamed him for not getting reimbursed for the x-ray services. Plaintiff
admitted that the primary concern for these patients was that they were not being
reimbursed for their bills. See Exhibit "E" at p. 66. Accordingly, Dr. Weinrich's
patients were not concerned with the language In the EOB form, but rather the fact
that their bills were not being paid.
48. Second, Dr. Weinrich was unable to give any examples of how the
statements exposed him to any type of ridicule or public hatred In the community.
49. Third, plaintiff was unable to set forth any special harm that resulted
from the publication of the EOB. During his deposition, plaintiff estimated that he
has lost approximately 30-40 percent of Its Income due to the statements In the
EOB. However, Dr. Weinrich concealed that there Is no evidence that illustrates
that his loss of Income, If any, was attributable to these statements. Exhibit "E," at
p.70.
SO. Since plaintiff Is unable to show that he has suffered any damages as a
result of these statements, he has failed to set forth a claim for defamation.
51. Even assuming arguendo that the statements set forth in the EOB are
considered defamatory, these statements were privileged.
52. Communications are privileged when made on a proper occasion, from
a proper motive, and In a proper manner. See Beckman v. Dunn, 419 A.2d 583,
587 (pa. Super. 1980).
:383471-1
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The Law offices of SPERO T. LAPPAS
205 State Street
Post Office Box 808
Harrisburg, PA 17108-0808
(717) 238-4286
By: SPERO T. LAPPAS, Esquire
Pa. Supreme Court identification no. 25745
ATTORNEY FOR THE PLAINTIFF
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
LESLIE WENRICH, D.C.
Plaintiff
.
.
CIVIL ACTION - LAW
.
.
: No.: 97-2288 CIVIL
v.
.
.
: JURY TRIAL DEMANDED
HIGHMARK, INC., d/b/a
PENNSYLVANIA BLUE SHIELD,
Defendant
:
.
.
PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
AND NOW, this 1(~ day of f J L ,_, 2002, comes the
Plaintiff, Leslie Wenrich, D.C., by and through his attorney, Spero
T. Lappas, Esquire, and requests the Court to enter partial summary
judgment in his favor and against the Defendant, respectfully
representing as follows:
1. The Plaintiff instituted a cause of action in defamation
against the Defendant in the Court of Common Pleas of CUmberland
County on or about May 1, 1997.
2. By Order of June 30, 1998, President Judge Hoffer ordered
the Plaintiff to submit his claim to the Medical Review Committee
of Highmark, Inc.
3. The Plaintiff did submit his complaint to the Medical
Review Committee and a "hearing" was conducted on May 4, 1999, at
The Law Offices of SPERO T. LAPPAS
Page 1
the offices of Highmark, Inc. in Cumberland County.
4. Presiding over that hearing was the Chairman of the
Medical Review Committee: Robert E. Albertini, M.D.
5. After this meeting of the Medical Review Committee, the
Plaintiff received by mail a notice indicating that his claim
against Highmark had been denied.
6. Thereafter, the Plaintiff filed a Complaint against
Highmark alleging that the procedure before the Medical Review
Committee was fatally flawed inter alia because certain members of
the Medical Review Committee were also members of the corporation,
and because the Medical Review Committee by virtue of its
composition, procedures, and conduct is not a constitutionally
adequate or legally appropriate forum for the adjudication of a
defamation claim such as the Plaintiff's claim.
7. After the pleadings closed, the Plaintiff has taken the
deposition of certain witnesses. These witnesses have confirmed
that the Medical Review Committee did not properly consider
Plaintiff's case.
S. The testimony of these witnesses establishes conclusively
that the Medical Review Committee is not an appropriate forum for
the presentation and adjudication of claims such as the Plaintiff's
defamation claim, and further conclusively establishes that the
Medical Review Committee did not provide constitutionally adequate
consideration of the Plaintiff's claim.
9. Accordingly, the Plaintiff seeks an order from this Court
The Law Offices of SPERO T. LAPPAS
Page 2
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PSS filed Preliminary Objections to Dr. Wenrich's original Complaint, and
on June 30, 1998, this Court, by Order and Opinion, dismissed the Complaint for
failure to take the claims through an alternative dispute resolution process as
required by plaintiff's Participating Provider Agreement. The Court determined
that, although the plaintiff argued that the claim was inappropriate for the Medical
Review Commillee (hereinafter "MRC") because it involved alleged defamation,
the dispute actually arose out of the provider agreement between PBS and Dr.
Wenrich and the case could be viewed as a dispute over quality of care. Wenrich
v. Hiahmark. Inc., No. 97-2288 Civ. Term (Pa. Ct. C.P. Cumberland, June 30,
1998).
Pursuant to the alternative dispute resolution process required by the
Provider Agreement, the MRC of PBS held a hearing to review the decision of
PBS to deny Dr. Wenrich's patients payment for the x-ray examinations he
performed. The Commillee issued its decision on June 1, 1999, affirming its
determination that the equipment was substandard and denying plaintiffs claims
for damages. In its decision, the Commillee noted that plaintiff had breached his
contractual obligations under the Pennsylvania Blue Shield Regulations for
Participating Providers,l and that PBS had acted properly and within its rights
I In support of its decision, the MRC relied on the following portions of the Blue
Shield Regulations for Participating Providers:
B-9 The determination as to whether any covered service meets
accepted standards of practice in the community shall be made by
Blue Shield in consultation with providers engaged in active clinical
2
when it denied the claims submitted by Dr. Wenrich and when it promptly notified
its members of the reason for the denial.
The facts surrounding the decision of the MRC need to be recited. PBS. as
a result of Its decision to commence a statewide review of the quality of
diagnostic x-rays performed in providers' offices and freestanding diagnostic
centers in 1993. developed a General Radiology Technology Assessment
Questionnaire to collect all needed technical data from providers who reported
total charge x-rays. The questionnaires were to alert Blue Shield to any possible
deficiencies and to the need to obtain sample files in order to investigate further
the provider's equipment. PBS sent Dr. Wenrich, along with over five thousand
other providers from various specialties in the eastern, central and western
regions of the Commonwealth, one of the questionnaires in April of 1993. Dr.
Wenrich returned the completed questionnaire within the month. PBS determined
that the equipment probably did not meet the accepted standards of quality in the
community.2 PBS sent a lelter to Dr. Wenrich requesting that he send random
practice. Fees for covered services deemed not to meet accepted
standards of practice shall not be collected from the subscriber.
B-15 Each participating Provider shall permit Blue Shield
representatives to make reasonable examination of the provider's
clinical records. including x-rays, relating to any covered service
performed for Blue Shield subscribers, when such examination is
necessary to resolve any question concerning such services.
(Regulations for Participating Providers, at 2-3.)
I Through the questionnaire, PBS learned the following facts:
1) Dr. Wenrich had one (1) x-ray machine in his office
2) Dr. Wenrich was not certain of the date of purchase
3
x-ray samples for review, pursuant to the Provider Regulations. After multiple
requests, PBS did not receive any samples. Thus, on May 9, 1996, PBS sent
another letter to plaintiff, stating that his failure to respond reinforced its
determination that his equipment was substandard, and effective thirty days (30)
from the date of the letter, no payments would be made for the x-rays.
Additionally, PBS informed Dr. Wenrich that his subscribers would receive the
following message:
Pennsylvania Blue Shield has determined that the equipment used
to provide this x-ray does not meet the accepted standard of quality
in the community. Therefore, no payment will be made. A
participating Provider may not bill the patient for these denied
services.
(MRC Hearing Minutes, at 4.) Although the letter also notified Dr. Wenrich that he
had the right to appeal the decision at that time, he did not respond. After the
thirty (30) day warning passed, PBS sent the letters. It was not until after the
letters were sent to the subscribers that plaintiff, through his attorney, began
3) the machine was pre-owned at the time of purchase
4) the equipment was not under a service contract
5) Dr. Wenrich did not subject the equipment to testing
6) Dr. Wenrich reported he had no performance logs for the film
processor
7) Dr. Wenrich had no written policies and procedures for a
quality assurance program
8) Dr. Wenrich's office was not inspected by the Pennsylvania
Department of Environmental Resources, Bureau of Radiation
Protection
(MRC Hearing Minutes, at 3).
4
communicating with PBS regarding his allegation of defamation.3 Based on these
facts, the MRC upheld its determination and dismissed the plaintiffs claims for
damages. Id. at 8.4
After the decision of the MRC, plaintiff filed a Petition to Vacate, Set Aside,
Modify and Reverse this decision in our Court. Plaintiff alleged that the hearing
held by the MRC was unfair, denied plaintiff due process, and was a result of
fraud. The filing of this Petition resulted in the initiation of a second action
alleging that the statements made by PBS in denying payment were false and
defamatory. Again, the plaintiff alleged that he suffered damages as a result.
Plaintiff requested that the decision of the MRC be vacated and the case proceed
to trial by jury in this Court.
The pleadings have closed and written discovery has been exchanged. Dr.
Wenrich and two members of the MRC have been deposed. Thus, the case is
ripe for a determination of Defendant's Motion for Summary Judgment.
l During those communications, PBS informed plaintiff that the proper forum for
any dispute between a Participating Provider and PBS was the Medical Review
Committee. However, plaintiff disregarded this and filed suit in this Court, which,
as noted before, was subsequently dismissed for failure to submit the claim to
the Medical Review Committee.
'Not only was Dr. Wenrich given multiple warnings regarding his refusal to
submit the requested samples, but PBS provided him with sufficient notice of its
forthcoming denials of payments to subscribers and the message within those
denials. Nonetheless, Dr. Wenrich still: 1) failed to submit samples; 2) failed to
question PBS on its proposed statement to subscribers regarding payment for
the x-rays provided by Dr. Wenrich; and 3) failed to utilize his right to appeal the
decision in the thirty (30) days allotted to him for such purpose, as was clearly
delineated to him in the May 9, 1996, letter from PBS. Dr. Wenrich clearly had
5
Pa. at14, 717 A.2d at 510 (1998) (emphasis added). Additionally, due process
requires that the forum be fair and impartial. kh (emphasis added).
(1) Notice and Opportunity to be Heard
The first element of due process judicial review is whether the plaintiff had
sufficient notice of the hearing and an opportunity to be heard. In this case, the
plaintiff testified that he did receive notice of the MRC hearing (Wenrich
Deposition, at 52). He also testified that he and his attorney were present at the
hearing and had an opportunity to present Dr. Wenrich's case to the MRC. (d. at
54-55. This included presenting a packet of material documents, which plaintiff's
attorney referred to as a "trial memorandum," to the committee members. kh at
57-58. Finally, Dr. Wenrich testified that there was no other witness or evidence
that he wished to present at the MRC hearing. kh at 72.
(2) Appropriate Forum
The MRC was the appropriate forum for Dr. Wenrich's claim in this case,
as previously determined by this Court in its Order and Opinion dismissing
plaintiff's original Complaint for failing to submit the dispute to the MRC. Wenrich.
No. 97-2288 Civ., at 5. Specifically, plaintiff had a contract with PBS that required
the use of the MRC to resolve disputes between PBS and its Providers. The
Provider Agreement, which plaintiff signed, required that plaintiff abide by all the
terms of the Agreement. including following the regulations and bylaws of PBS.
These bylaws provide that "all mallers, disputes, or controversies arising out of
the relationship between the corporation and professional providers...shall be
7
considered, acted upon and disposed of and determined by the appropriate one
of the two Review Committees hereinafter referred to," (Bylaws, at Article X, 1.)
As determined by this Court, the issue in the present case was a dispute arising
out of the relationship between PBS and Dr. Wenrich, a professional provider,
and thus the MRC was the appropriate forum to resolve plaintiffs claim.
(3) Fair and Impartial Forum
In Rudolph the Supreme Court held that the MRC was not impartial
because it was composed of members of the board of directors of PBS, pursuant
to its bylaws. !!h at 15, 717 A.2d at 510-511. However, the Court stated that, "if
the bylaws of Blue Shield were written to include the possibility of an unbiased
panel, a remand for a new hearing before a reconstituted and impartial panel
would have been appropriate," !!h at 15, 717 A.2d at 511. Thus, the Court held
that the provider's due process rights had been violated because the MRC, given
that a majority of its members were also employees of PBS as provided for under
the bylaws,S did not provide a fair and impartial hearing.
l The bylaws in use at the time of Rudolph stated:
There shall be a Medical Review Committee consisting of at least
five (5) members, each of whom shall be appointed by the Chairman
of the Board of Directors of the Corporation and each of whom shall
serve until his successor is appointed. A majority of the members of
the Medical Review Committee shall be doctors who are either
members of the Board of Directors of the Corporation or members of
the Corporation.
Rudolph, 553 Pa. at 12-13, 717 A.2d at 509-510 (citino Bylaws in effect at time of
decision).
8
In response, PBS changed its bylaws to reflect the decision of the
Pennsylvania Supreme Court, and limited the number of employees that can
participate on the MRC. Now, the composition of the MRC requires a majority of
non-corporate members. (Bylaws, at ~9.2). The pertinent section of the bylaws is
Article IX, Section 9.2, which states:
9.2 Medical Review Committee. There shall be a Medical Review
Committee consisting of at least eight (8) members. A majority of the
members of the Medical Review Committee shall be Providers who
are Participating Providers or Preferred Providers with the
Corporation ("Provider Members"), and the balance shall be
consumers covered under health care contracts issued by the
Corporation ("Consumer Members"). At least three fourths of the
Provider Members of the Committee shall be Medical Doctors or
Doctors of Osteopathy.
Id. Additionally, Section 9.4.2 states that "[n]o member shall be a Director of the
Corporation" and Section 9.4.3 states that "[a]t least two thirds of the members of
any Review Committee shall have no relationship with the Corporation (other
than as providers...)" (Bylaws, at ~~9.4.2, 9.4.3). Finally, Section 9.4.4 states that
"[n]o member of any Review Committee shall have any conflict of interest that
would prevent him or her from rendering a fair and impartial decision in any
dispute between the Corporation and its health care providers" (Bylaws, at
~9.4.4 ).
At the time of plaintiff's hearing on May 4, 1999, these changes were in
effect, and the MRC consisted of three PBS employees who are considered
corporate members and seven non-corporate members (MRC Hearing Minutes,
at 1). The minutes of the hearing also establish that, of the four professional
9
MRC members that voted, only one was a corporate member. Id. Thus, at the
time of the hearing, the MRC was in compliance with the amended bylaws which
required at least two thirds of the MRC to be non-corporate members.
Additionally, there is no evidence to indicate that the MRC panel was
biased. The plaintiffs depositions of Dr. William Daiber and Dr. Robert E.
Albertini, both MRC members who were present for the plaintiffs hearing, show
that neither was influenced by their relationship with PBS in making the decision
regarding Dr. Wenrich's claim. In his deposition, Dr. Daiber testified that his
status as a professional member of PBS has had no impact on his work on the
MRC or on his decision in Dr. Wenrich's hearing.6 Similarly, Dr. Albertini, the
· Dr. Daiber's testimony regarding any possible impact his status as a
professional member of PBS had or has on his role as a member of the MRC is
as follows:
Q: Did the fact that you were a professional member of the
Highmark corporation in any way influence or impact upon your work
as a member of the Medical Review Committee?
A: No.
Q: The fact that you were a professional member of the
corporation, did that impact or have any influence on the decision
that you assisted in reaching via the Medical Review Committee on
May 4th, 1999 with regard to Dr. Wenrich?
A: No.
Q: The fact that you are paid for services rendered to patients of
yours by Highmark, Incorporated or Pennsylvania Blue Shield, does
that in any way influence your work on the Medical Review
Committee?
A: No.
Q: The fact that you were paid an honorarium of 800 dollars for
your work as a member of the Medical Review Committee, without
expenses at that point in time, did that in any way influence your
review and decision with regard to any claims that come before the
Medical Review Committee?
10
Chairman of the Commlllee and the only vollng corporate member, testified that
his status as a corporate member did notlnlluence his decision regarding Dr.
Wenrich's claim. (Albertini Deposlllon, at 20.) Dr. Alberllnl also testified that he
did not receive any compensallon for being a corporate member, and that any
financial reimbursement he received for traveling did not Inlluence his decisions
on the MRC In any way. J.Q..
Thus, these depositions show that there Is no evidence that any of the
MRC members present at Dr. Wenrich's hearing were biased. Furthermore,
because the evidence shows that the MRC was within the regulations of the
amended bylaws and the members who were present were not biased, all the
evidence shows that Dr. Wenrich received a fair and impartial hearing.
(4) Fraud or Misconduct
The decision of the MRC was not a result of fraud or misconduct. The
MRC held an Impartial hearing, evaluallng the quality of Dr. Wenrich's care by
asking him questions regarding hh; x-ray equipment. After listening to plalntiWs
case via his allomey, the panel questioned him about his failure to submit x-ray
samples and allow PBS to conduct tests on his x-ray equipment. Based on the
Information provided by plaintiff, the questioning of Dr. Wenrich, and an
evaluallon of PBS regula lions, the MRC decided that Dr. Wenrich was not
A: No.
(Dalber Deposlllon, at 35.)
II
a critical factor in determining whether the communication is defamatory, and, if
the communication was not intended for a large audience or the publication is
extremely limited, it is not defamatory. Maier, 448 Pa.Super. at 283, 671 A.2d at
704. Additionally, communications that may annoy or embarrass a person are
not sufficient as a matter of law to create an action in defamation. Id.
Plaintiff has failed to show thCltthe statements in this case were
defamatory. In looking at the facts in the light most favorable to the plaintiff, it is
clear that there is insufficient evidence to prove defamation. In his deposition, Dr.
Wenrich stated that, although his patients blamed him for not getting reimbursed
for the x-ray services, their primary concern was not about what the statement
said, but the fact that PBS did not reimburse them (Wenrich deposition, 66).
Additionally, plaintiff failed to provide any examples during his testimony of how
he has been exposed to ridicule or public hatred in the community.8 Finally, Dr.
· Dr. Wenrich's testimony was as follows:
Q: Is there anything of an example you can give how these
statements exposed you to any type of ridicule or public hatred in
the community?
A: Well, it puts you on a defensive position. When you do an x-
ray, you're not reimbursed. And the patient says, well, look at this,
his x-rays are no good.
So I don't get to hear all of this, but that's what I hear
secondarily.
Q: Who have you heard that from?
A: I don't know if I can say who. It's been a lot of years. They're
no longer doing it like that, by the way.
Q: What do you mean, who is no longer doing?
A: Blue Cross and Blue Shield.
Q: I thought you were talking about the patients. So you can't
name anyone specifically who you were just referring to.
15
containing the alleged defamatory statements were sent to his patients. Finally,
as noted previously, it is completely within the jurisdiction of PBS to make such
determinations of a Provider's quality of care based on his or her failure to abide
by his or her contractual obligations. The statements were not false, nor were
they actuated by malice or negligence. Instead, they were directly related to the
purpose for which they were sent, which was to inform the patients why they
were not receiving reimbursement for Dr. Wenrich's services. Furthermore, they
were sent only to those patients to whom it was necessary for the
accomplishment of that purpose.
It is clear that there is no genuine issue of material fact regarding whether
plaintiff has a claim for defamation against the defendant. Not only did plaintiff fail
to show that the statements were in fact defamatory, but, even assuming that
they were, the statements were privileged and PBS did not abuse that privilege.
For the reasons stated above, defendant's Motion for Summary Judgment
is granted and plaintiff's Complaint is dismissed with prejudice.
18
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