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A doctor who filed suit against Independence Blue Cross after twice being denied membership in the insurer’s network has the right to depose the non-employee members of the IBC committee that decides which physicians should be admitted into the network, a Philadelphia judge has ruled. In Fanelli v. Independence Blue Cross, a physician and his practice group initiated an equity action that seeks from the court a “determination that Dr. [Andrew] Fanelli should be admitted as a credentialed member of IBC’s participating physician network.” In reaching his decision, Judge Albert W. Sheppard Jr. concluded that the confidentiality provision of the Peer Review Act does not protect IBC’s credentialing committee. “In order for the Peer Review Act to make confidential the proceedings of the credentialing committee, defendants must be ‘professional health care providers,’” Sheppard wrote. “Under the definitional provision of the statute, as well as the applicable law, IBC is not a health care provider.” Fanelli is assigned to the Commerce Case Management Program. According to Sheppard’s opinion, an IBC credentialing committee – consisting of six non-employee health care providers already credentialed by IBC – held a hearing in January 2004 to decide whether Fanelli and Regional Gastrointestinal Consultants would be allowed to retain membership in IBC’s Keystone Health Plan East network. The committee unanimously decided Fanelli should not remain in network. Fanelli handed in a new application in September 2004, but was rebuffed by a committee comprised of the same members as in January 2004. Fanelli and his practice group filed suit against IBC in December 2004. The plaintiffs later announced their intention to depose the members of the credentialing committee that had reviewed Fanelli’s application, according to the opinion. The defense then moved for a protective order that would bar those depositions. In May 2005, Sheppard ordered IBC to produce the committee’s members for deposition. Sheppard argued at the outset of his opinion that his May order was interlocutory and asked the Superior Court to quash IBC’s appeal. “Plaintiffs allege that IBC’s denying Dr. Fanelli’s credentials was an action ‘taken in bad faith and was retaliatory in nature, due in part, to Dr. Fanelli’s having repeatedly challenged IBC’s arbitrary and capricious behavior toward him,’” Sheppard wrote, citing the plaintiffs’ complaint. He added later, “The process by which the committee made its determinations, an issue which will be explored at the depositions of the committee members, has the potential to resolve issues in this litigation. . . . This court believes that the issue raised by defendants in the instant appeal is inseparable from this case.” But if the appeal is not quashed, Sheppard wrote, the order should be affirmed. He rejected the argument that the depositions of the credentialing committee members would be irrelevant because they cannot testify about IBC’s corporate structure. The plaintiffs, he noted, looked to find out what the grounds for the committee’s decision had been, what information they may have received about Fanelli outside of the hearings process and how IBC employees behaved during the hearings, among other facts. “This line of questioning is relevant to the issue [of] whether the hearings were conducted fairly and in accord with the laws of this commonwealth,” Sheppard wrote. Sheppard also argued that the credentialing committee, though itself composed of health care providers, should not be protected by the confidentiality provision of the Peer Review Act, as that section of the law addresses “evidence in any civil action against a professional health care provider.” “The act’s list of examples demonstrates that it applies to those who provide health care directly, or administer or operate a health care facility,” Sheppard wrote. “IBC’s own Web site characterizes IBC and its subsidiaries as ‘health insurers,’ not providers of health care.” Plaintiffs’ attorney Gilbert B. Abramson, of his own Philadelphia-based firm, said the opinion “speaks for itself.” “I think the essence of our inquiry [centers on the fact] that there was a high official of IBC at the [committee's] deliberations,” Abramson said. “That’s sort of like if you had a prosecuting attorney in with the jury. And we want to know what happened.” IBC’s outside counsel in the matter, Gerald Dugan of Dugan Brinkmann Maginnis & Pace in Philadelphia, did not immediately respond to calls seeking comment. A call to IBC was also not returned. (Copies of the 11-page opinion in Fanelli v. Independence Blue Cross, PICS No. 05-1683, are available from The Legal Intelligencer . Please refer to the order form on Page 13.)

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