State Lines


Supreme Court rules medical directors of insurance companies are accountable to Board of Medical Examiners

A seven-year court case that has attracted the attention of medical boards across the country is finally settled. This January, the Arizona Supreme Court upheld a July 1997 decision by an appellate court that gave the state's Board of Medical Examiners (BOMEX) the power to discipline medical directors of insurance companies.

The case stemmed from a 1992 incident in which Dr. John Murphy, Medical Director of Blue Cross and Blue Shield of Arizona, refused to pre-certify a patient's gallbladder surgery because it was not "medically necessary." The patient's surgeon, Dr. David Johnson, proceeded with the surgery, which Blue Cross eventually reimbursed when pathology reports proved the gallbladder was diseased. Johnson sent a letter of complaint to BOMEX claiming Murphy's decision demonstrated "unprofessional conduct" and "medical incompetence." Johnson also claimed Murphy's decision caused the patient to question surgery and thus damaged his relationship with the patient.

BOMEX issued Murphy an advisory letter of concern, which his counsel contested on the grounds that BOMEX had no jurisdiction to take action against Murphy, a non-practicing physician. BOMEX argued it did in fact have jurisdiction over Murphy because he was one of its licensees and was making medical decisions.

In 1994, a judge ruled Blue Cross and Murphy could not be punished, a decision that was later overturned in appellate court. Nancy J. Beck, BOMEX's attorney, remarked, "That a licensing Board has authority over its licensees is a great victory for common sense."

BOMEX is the first state medical board in the U.S. to take action against the director of an insurance company for a medical necessity decision. James R. Winn, Executive Vice President of the Federation of State Medical Boards, predicts other states will follow. The Texas medical board, for instance, recently passed a rule requiring physicians who work as medical directors for insurance companies to be licensed in Texas and submit to the Board's jurisdiction.

New York

New consumer brochures educate the public about professional licensing

The Board of Regents, New York's professional licensing body, recently published consumer brochures for 38 licensed professions that explain how to verify a professional's license and file a complaint. Additionally, the Regents announced consumers would be able to e-mail complaints beginning January 1998.

The State Education Department, the umbrella agency housing the Board of Regents, launched this public education campaign last January with the nation's most comprehensive Internet access to professional credentials and disciplinary information. The brochures are part of the department's ongoing effort to become more consumer-friendly. "These brochures are critical to our efforts to help protect unsuspecting New Yorkers from the harm that could result from professional misconduct or unlicensed practitioners," said State Education Commissioner Richard P. Mills.

The brochures explain, in plain English, the services different professionals provide and the education and experience they must possess, as well as procedures for filing complaints. The Department's Office of the Professions and members of the 25 State Boards for the Professions developed the brochures with the help of consumers and professional associations. The brochures will be distributed in libraries and community centers, and will also be available on the Internet at

For more information, call the State Education Department's Office of the Professions at 518/474-3817.


Court affirms statute preventing chiropractors from "holding out" as physical therapists

Chiropractors cannot advertise they provide physical therapy or hold themselves out as physical therapists, ruled a three-judge panel of the Commonwealth Court of Pennsylvania last October. The ruling settled a five-year dispute between physical therapists and chiropractors in that state.

The State Board of Physical Therapy prosecuted chiropractor Thomas Boch in 1995 for violating the state's Physical Therapy Practice Act. Specifically, Boch had published an advertisement in 1993 stating he provided "physical therapy." Boch and the Pennsylvania Chiropractic Society fought back by filing a civil rights suit, alleging Boch's first amendment rights had been abridged, in federal court. Both a federal district court and court of appeals abstained from rendering a decision and turned the case back to the state.

Judge Silvestri of the Commonwealth Court ruled in favor of the physical therapy board. While Silvestri acknowledged the overlap between these two professions, he stated this did not permit chiropractors to violate a state Practice Act. "When the words of a statute are clear and free from ambiguity," he said, "the letter of the statute is not to be disregarded." (source: FSBPT's Federation Forum, Winter 1998, pp. 8-9)