Blue Cross of California has agreed to discontinue its policy that pays doctors more money for performing various endoscopy procedures in ambulatory surgery centers (ASCs) than in hospitals. The decision is pending regulatory review. This follows a move by the state’s Department of Managed Health Care (DMHC), which recently filed a lawsuit challenging the legality of the Blue Cross policy, concluding that the policy required prior regulatory approval. DMHC stated in its brief that the company’s financial incentive program "represents a radical departure from traditional incentive programs that have to date focused on aggregated or general payments." The organization also concluded that the endoscopy policy "is clearly a fiscal and administrative management tool aimed at influencing physicians to make a particular medical decision — to decide to perform endoscopies in an ASC or office setting rather than an outpatient hospital facility."