L.A. jury sides with doctor in Anthem Blue Cross case

In a rare case, a Los Angeles jury awarded $3.8 million in compensatory damages to a Porter Ranch doctor who contended insurance giant Anthem Blue Cross retaliated against him for being a strong patient advocate.

The jury ruled late Monday in favor of Jeffrey Nordella, 58, an urgent-care and family-practice doctor who alleged that Anthem barred him from its network in 2010, when he applied to be a preferred provider. The damages could climb higher Friday, when the 12-person panel reconvenes and considers punitive damages against Anthem, a unit of insurance giant WellPoint Inc.

The jury found that Anthem, the state’s largest for-profit health insurer, violated Nordella’s right to “fair procedure,” and the company did so with “malice, oppression or fraud.” That latter finding prompted the hearing Friday in Los Angeles County Superior Court to determine punitive damages.

Anthem denies Nordella’s allegations and is considering an appeal.

Nordella said he was turned away because he had challenged the denial of hundreds of patient claims over the years when he was previously included in Anthem’s network. He said he often protested Anthem’s conclusion that care wasn’t medically necessary and would not be covered. Nordella went so far as to meet with top Anthem officials in 2001.

Anthem “held this grudge and continued to lie and deceive,” Nordella said in an interview.

Doctors and health insurers have battled over reimbursements and the denial of claims in court for years. But legal experts said cases like Nordella’s usually never reach trial or result in multimillion-dollar verdicts.

“I was surprised by the size of the verdict, and it’s really the first case I’m aware of in years,” said Carol Lucas, a healthcare lawyer in Los Angeles who represents doctors and medical groups. “Insurance companies will likely look at what happened here to Anthem, and they will make sure they can justify any exclusions from their networks.”

This case comes as health insurers, in a bid to hold down costs, are increasingly dropping doctors and hospitals and promoting smaller networks. Insurers typically try to negotiate lower rates with the fewer providers left in the network, who get higher patient volume in return.

Last fall, Anthem persuaded the city of Los Angeles to adopt a lower-priced “narrow network” that excluded certain doctors affiliated with UCLA and Cedars-Sinai Medical Center. That decision prompted loud protests from some city workers.

Nordella said many doctors are unwilling to challenge powerful insurance companies because their incomes are so dependent on being in these provider networks. “Physicians are so afraid to come forward,” he said, “and I hope this changes that.”

Anthem Blue Cross “is disappointed in the outcome and will examine our options in filing an appeal,” said spokesman Darrel Ng.

The company rejected Nordella’s application for its PPO network because he wasn’t board certified in family medicine and because Anthem already had a sufficient number of primary-care physicians, Ng said. At the time, Nordella was medical director at Porter Ranch Quality Care, a walk-in clinic that offers urgent care and family medicine.

Theresa Barta, a Newport Beach attorney who represents Nordella, said the insurance company contended it had 137 primary-care physicians in its network within 10 miles of Porter Ranch. At trial, Anthem could name only seven of those doctors, Barta said.

Because of frequent changes in its list of physicians since 2010, Anthem said, it could not retrieve all of the requested information. The company maintains that its doctor network was adequate when Nordella applied.

In California, the most influential case on this issue has been a state Supreme Court ruling in 2000 in favor of a doctor who challenged his termination from another insurer’s network. That ruling, experts say, established the precedent that health insurers must grant doctors due process when they bar them from their networks if the insurer’s members represent a significant part of the physician’s income.

“The insurance company’s decision can’t be arbitrary or for reasons beyond the ability of the physician to practice medicine,” said Thomas Jeffry, a healthcare attorney in Los Angeles who represents medical providers.

Barta said that at the hearing Friday over punitive damages, she will tell jurors that Anthem Blue Cross in California generated $525 million in profit in 2010 for the parent company, WellPoint, which also runs Blue Cross plans in 13 other states.

During closing arguments at trial, Barta said Anthem intentionally limits its physician roster to make it more difficult for PPO patients to get care, which reduces Anthem’s medical costs and boosts its profits.

Nordella’s wife was murdered and two of his children were assaulted in 2005. He said that gave him a deep appreciation for what patients face. He received the news of the verdict while riding his John Deere tractor and planting grass seed for his daughter’s outdoor wedding this summer.

“It puts life in different perspective,” he said, “when you are sitting on that side, as a patient.”

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