CCS turns to Albany in fight to win back Independent Health - The Buffalo News

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CCS turns to Albany in fight to win back Independent Health

Dr. W. Sam Yi bought CCS Oncology in 2008, turning a small practice into one of the biggest cancer treatment groups in the region.

The cancer care provider quickly garnered an estimated one-third of the area's outpatient oncology market. But after a dispute with Independent Health led the insurer to drop the practice from its network, hundreds of patients and 10 doctors have left.

Now, CCS is taking an unusual step to get Independent Health to reverse its decision – bringing its fight to Albany.

The company brought in a veteran political insider to help enlist elected officials to persuade state regulators to bring the parties back together and has encouraged cancer patients to call Gov. Andrew Cuomo.

For CCS, the stakes are huge. With Independent Health's decision last year to end its contract with CCS, about 2,600 active patients were forced to choose between CCS or Independent Health. Yi says about half those patients left, along with the 10 physicians.

"This is about patients' right to choose which health care provider they want to receive their cancer services from," Yi said. "Why take away good options from these people, especially when we are talking about a community-based setting such as CCS?"

The CCS campaign is occurring against a backdrop of legal actions, as well as a federal investigation reported by The Buffalo News last week. They include:

– CCS filed lawsuits against Independent Health, as well as against two of the physicians who left.

– CCS itself is the subject of another lawsuit by two Tennessee companies that claim CCS failed to pay for services and hired away employees.

– Yi acknowledged to The Buffalo News that federal authorities are investigating CCS Oncology for possible billing irregularities.

– There also is a whistleblower civil suit against CCS that includes allegations that staff provided and billed for unnecessary treatments, according to a source familiar with the complaint who spoke on the condition of anonymity.

Yi contends CCS has done nothing wrong.

"We have always conducted ourselves professionally and by the book," he said.

"We don't like to go through an investigation. But we know it happens, and we are confident we will be cleared of any accusations," he said.

Reimbursement an issue

Last June, Independent Health notified CCS Oncology that it was dropping the practice from its network as of Dec. 31 following 16 months of unsuccessful negotiation over a new reimbursement model for services at the practice.

CCS filed a lawsuit claiming the Amherst-based health insurer drove patients away and prompted doctors to leave. Among other things, the lawsuit against Independent Health in federal court in Rochester alleges the insurer violated a provision of federal law that prohibits discrimination in health care by insurers, violated a provision of the Affordable Care Act that prohibits excluding an individual from health insurance for a pre-existing condition, and violated CCS' physicians' rights to advocate on behalf of their patients as guaranteed under New York Public Health Law.

"We were extremely close to getting an agreement before Independent Health withdrew. This is not a case of irreconcilable differences," said Russ Gugino, a longtime Republican insider retained by CCS Oncology.

"The lawsuit is a technique to get back to the table. No one is looking to have the lawsuit answer the question," he said.

CCS Oncology CEO Dr. Sam Yi speaks during a news conference at CCS Oncology in Orchard Park. (Derek Gee/Buffalo News)

The insurance company countered that it acted reasonably in declining to renew its contract without cause.

Independent Health has said it provided more than the required amount of time for patients and physicians to prepare for the end of the contract, including helping patients find alternative physicians if they wanted. The company has said it followed "all regulatory and contractual requirements" in deciding not to renew the agreement without cause. It also has noted that a panel of community physicians heard CCS' appeal of the non-renewal and ruled in Independent Health's favor.

Yi said 2,600 Independent Health patients were affected, representing about 30 percent of the oncology patients at CCS, which also includes an affiliate – CCS Healthcare – that provides primary and specialty medical care. Independent Health continues to insure patients seeking other types of care at CCS, and other insurers continue to cover cancer treatment at CCS.

"Patients were asked to find a new doctor while they were still going through courses of treatment," Yi said. "That is an unfair decision for a patient to have to make. A lot of them, I'm sure, are happy with Independent Health. But they entrusted their lives to their cancer specialist to provide the best care."

Yi said Independent Health, in seeking to move to a new reimbursement approach, expressed concern that CCS Oncology overutilized tests and treatments, deviating significantly in spending compared to other oncologists in the community. He countered that CCS doctors follow national guidelines and that the insurer did not share with him how it arrived at that conclusion.

Yi also said that whatever services CCS Oncology provided were prior-approved by Independent Health. Insurance company experts say that's not unusual.

Insurers are reluctant to deny cancer care, especially in a complex specialty where what's appropriate treatment may not be clear in every case. But, as with other areas of medicine, insurers will examine aggregate claims data to compare physician practices.

Enlisting public officials

Prior to news of the federal investigation becoming public, Gugino and Yi enlisted a host of public officials to urge Maria T. Vullo, superintendent of the state Department of Financial Services, to review the Independent Health matter. They said the officials include Erie County Legislator Ted Morton, Erie County Comptroller Stefan Mychajliw, and Assemblymen Mickey Kearns, Robin Schimminger and David DiPietro, state Sen. Michael Ranzenhofer, and Erie County Conservative Chairman Ralph Lorigo.

"We're asking the department to support the cancer patients in getting services. A lot of patients were adversely affected," said Ranzenhofer, who signed a letter to Vullo. "Whatever happens in the investigation, is separate."

The letter asks Vullo to review whether cancer patients have a sufficient number of network choices available, and it recommends that such a review may show there is a need for CCS and Independent Health to resume contract negotiations.

Linda Boulange, who was treated for breast cancer at CCS, has been a prominent patient supporter of the practice, appearing in a May 26 news conference organized by CCS.

"Independent Health's decision put patients in a difficult situation," said the retired speech pathologist from Eden who stressed the importance of patients having easy access to second opinions.

Boulange said she is currently a member of Independent Health but was insured by a different company when she was treated by CCS in 2013.

Linda Boulange, of West Seneca, who was diagnosed with breast cancer in 2013, looks on during a news conference at CCS Oncology in Orchard Park to press Independent Health to negotiate an agreement to cover patient care at CCS Oncology. (Derek Gee/Buffalo News)

Most recently, Independent Health filed a motion to dismiss CCS’s complaint. It contends CCS is attempting to shoehorn its displeasure with the non-renewal into a variety of common law and statutory claims with misleading and unsupported statements. The court previously denied a CCS motion seeking a temporary reversal of the insurer's decision.

"The judge ruled that CCS did not meet the legal standard required for the extraordinary relief sought, including finding that they failed to establish a likelihood of success on the merits of their lawsuit," Independent Health officials said in a statement.

“Independent Health continues to offer our members a comprehensive network of select, high-performing oncology specialists that includes Buffalo Medical Group, Cancer Care of WNY, Roswell Park Cancer Institute and many other community oncologists," the statement said.

Independent Health officials, citing the lawsuit, declined to comment further.

Lawsuit targets doctors that left

Six of the CCS physicians who left went to Kaleida Health's General Physician PC to form a cancer care practice, and CCS filed a lawsuit against two of the physicians  – Herbert Duvivier and Haider A. Khadim – claiming they violated the terms of employment agreements.

Yi said about 12 physicians remain in the oncology practice after the departure of 10, and it wouldn't surprise him if others left in the coming weeks and months.

Donald Boyd, executive vice president of business development and affiliation at Kaleida Health, said the hospital system identified outpatient oncology services as an area of medicine to bolster. The hospital-based oncology market is dominated by Catholic Health, Roswell Park Cancer Institute, Kaleida Health and Erie County Medical Center.

The CCS lawsuit claims that Khadim and Duvivier violated employment contracts that restricted them from treating CCS patients or practicing medicine within a certain distance from CCS offices for one year after leaving.

"The physicians joined another organization largely based on the Independent Health issue. Their patients were telling them that they could not afford to see them and pay out of pocket. Obviously, physicians don’t like to hear that," said Yi.

The doctors did not respond to a message seeking comment left through their office manager. But a Kaleida Health official expressed confidence that the doctors had a strong legal case.

Business executives, physicians and other professionals often have non-compete and non-solicitation clauses written into their contracts, said Robert L. Boreanaz, a senior partner with Lipsitz Green Scime Cambria who has written and reviewed hundreds of employment contracts in his career.

"The non-compete clauses typically have to be reasonable in their scope and jurisdiction," said Boreanaz, who is not involved in this lawsuit.

In his experience, a judge would find geographic restrictions of not working for a competitor located within 20 miles and time restrictions of waiting one year reasonable, Boreanaz said.

Non-compete clauses generally are "black and white" and "very enforceable," he said, but employees can challenge them if there's been a dramatic shift in the employee's income, job title or responsibility.

CCS also subject of lawsuit

Radphys Oncology Services and Linac Repair Service, both based in Knoxville, Tenn., have sued CCS Oncology in federal district court in Buffalo. The lawsuit accuses CCS of failing to pay the companies for services provided, for breach of contract and for violating non-solicitation provisions in the contracts by hiring away Radphys and LRS employees.

CCS hired Radphys to provide medical physicists who ensured the accuracy of the radiation that was delivered to CCS patients, and CCS hired LRS to maintain equipment used in the treatment of patients, according to the lawsuit.

The lawsuit is seeking at least $760,000, plus attorneys' fees and interest. CCS, in its response, denies the allegations in the suit. The lawsuit, filed in January, was scheduled to go to mediation beginning in June.

Radphys CEO Robbie Hakeem, who is a principal with LRS, declined to comment, based on his attorney’s advice.

In a court filing, an attorney for CCS denied the allegations outlined in the Radphys lawsuit.

Meanwhile, Yi remains confident that CCS will emerge from what he describes as a "negative cloud."

"For anyone to think that in this age of close monitoring, to think you can get away with practicing medicine with just a financial motive is crazy. You might get away with it for a few years. But eventually you are going to get caught," he said.

"We're going to overcome whatever negativity there might be, and CCS will eventually come out clear of any false accusations to rebuild our services, and we'll come out stronger," he said.

Feds probe CCS Oncology; whistleblower claims billing fraud

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