Doctors lose money in HMO pool. (Community Blue to withhold doctors' fees; health maintenance organizations)

Community Blue has told affiliated doctors that it will keep a portion of their fees to help cover a $7.2 million loss in medical costs last year.

Community Blue, the HMO of Blue Cross & Blue Shield of Western New York Inc., is keeping $3.6 million or 25 percent of the $14.4 million pool of money normally returned to its 1,800 physicians if the medical budget is met.

HMOs retain a certain percentage of the fees paid to the physicians throughout the year. Called withholds or contingency reserve funds, the money ensures that an HMO's medical costs will be covered and serves as an incentive to doctors to keep costs down.

"We can't continue to merely increase …