NEW
HAVEN (AP) -- The nation's largest obstetrician
and gynecologist management company has been
subpoenaed as part of an investigation into
whether it received insurance kickbacks that
artificially inflated malpractice insurance
rates for Connecticut doctors, state and company
officials said.
Women's
Health Connecticut of Avon provides management
services to more than 140 doctors and other
health care providers around the state. It has
been one of the most vocal supporters of a cap
on awards in medical malpractice cases.
The
company received a subpoena for insurance
documents Friday and planned to comply, said
Nancy Bernstein, the company's president.
Connecticut
Attorney General Richard Blumenthal confirmed
the subpoena was part of an investigation into
whether the company profited from an illegal
insurance brokerage deal that drove up premiums
for unwitting doctors.
"The
price of their insurance was raised as a result
of this scheme," Blumenthal said.
"We're talking about literally hundreds of
doctors who see thousands of patients for ob-gyn
services."
Companies
hire brokers to help them find the best
insurance providers, who then pay the brokers a
commission. It is illegal for brokers to pay
clients or share commissions to secure their
business - a practice called rebating.
The
Women's Health Connecticut investigation adds a
new wrinkle to the typical rebating probe. The
company's former insurance broker, Hilb Rogal
& Hobbs, acknowledged last month that its
officials may have accepted extra fees, which
are illegal, from insurance providers in
exchange for steering business.
Blumenthal
is investigating whether those illegal fees were
shared with Women's Health Connecticut managers
without the knowledge of the doctors, who paid
more for insurance because the hidden fees were
wrapped into their premiums.
"We
don't believe that to be the case," said
Women's Health Connecticut's in-house attorney,
Katherine Keane. "If the investigation is
raising those issues, we would certainly deny
it."
Blumenthal
said the Women's Health subpoena is one of
several filed in a wider investigation of the
industry.
"We
know of at least two other ob-gyn groups that
engaged in similar practices, so the magnitude
and ramifications are striking," Blumenthal
said. "The Women's Health kickback-sharing
scheme is not an isolated or single instance of
potential abuse in this industry. It seems to be
part of a pattern."
Women's
Health Connecticut was formed in 1997 to provide
billing and other managerial support for doctors
who had been hiring their managerial staffs
individually. The company says it is already the
nation's largest partnership between ob-gyn
doctors and managers and plans to spread the
model nationwide.
Dr.
Richard S. Ruben, a Danbury obstetrician who
organized the doctors that partnered with
Women's Health, said company officials didn't
profit off the selection of an insurance company
and never tried to cut corners.
"We
always said, 'No. Let's do it right," said
Ruben, who is also chairman of the company's
board of directors.
The
Women's Health Connecticut investigation
accelerated late last month when HRH announced
the resignation of its president, fired another
employee and turned over documents to federal
and state prosecutors and insurance regulators.
"Given
that we are continuing to assist in their
investigations, it would be inappropriate to
comment further," HRH attorney Ross Garber
said. The company has pledged to repay any
clients who were overcharged.
State
regulators are conducting their own rebating
investigation into HRH and Women's Health, said
Connecticut Insurance Commissioner Susan
Cogswell.
The
Doctor's Company, the California-based company
that sold insurance to Women's Health, is
conducting an audit of the account but has not
been subpoenaed, spokeswoman Jesmine Hulsey
said. Women's Health is no longer affiliated
with HRH or the Doctor's Company and is now
self-insured.
(Copyright
2005 by The Associated Press. All Rights
Reserved)