Anthem Blue Cross, Blue Shield of California Face Fines for Rescissions

The Department of Managed Health Care is further investigating the rescission of 1,770 patient policies by Anthem Blue Cross and 400 rescissions by Blue Shield of California after failing to reach a settlement agreement with the insurers, the AP/San Francisco Chronicle reports (Tayefe Mohajer, AP/San Francisco Chronicle, 7/8).

DMHC Director Cindy Ehnes said, "Anthem Blue Cross and Blue Shield have not agreed to reissue health coverage, so we will be going back through each of their approximately 2,170 rescission cases to pursue individual fines in each case."

Daniel Zingale, a health care adviser to Gov. Arnold Schwarzenegger (R), said that Anthem Blue Cross could face fines of as much as $200,000 for each case, more than the insurer could have faced under a settlement agreement.

Health Net, Kaiser Permanente and PacifiCare have reached agreements with the state to reinstate members' coverage.

Leslie Margolin, president of Anthem Blue Cross, said the insurer has been working to negotiate a settlement with the state for several months (Girion, Los Angeles Times, 7/8) (News low in story).

The additional scrutiny from DMHC comes after the state announced that it would not pursue a previously announced $1 million fine against Anthem Blue Cross because of concerns about the potential for the insurer to stage a lengthy court battle (Mohajer, AP/San Francisco Chronicle, 7/8).