Blue Cross Employees Address Policy Cancellations
Four Blue Cross of California employees last summer testified that the insurer reviews as many as 1,500 policies per week and cancels those in which medical record information was misstated or omitted, whether it was intentional or not, the Los Angeles Times reports.
The employees testified as part of a lawsuit that claimed Blue Cross routinely canceled policies for members after reviewing applications for inconsistencies, rather than fraud. According to legal experts, state law permits insurers to cancel policies only if members made deliberate misstatements or omissions in their applications.
Ten similar lawsuits were filed last month (Girion, Los Angeles Times, 4/26).
Plaintiffs said they filled out their applications for an individual health policy honestly, and treatment was authorized by Blue Cross for months before they were diagnosed with a previously unknown and serious medical condition. Some patients said they cannot afford follow-up care since their insurance has been canceled, and the retroactive cancellation of their policies has left some with medical bills totaling more than $100,000 (California Healthline, 3/28).
Blue Cross employee Sheila Millan testified that reviews were prompted by claims made for treatment for certain conditions, such as hypertension, diabetes and cardiovascular disease. The list of conditions was sealed by the court, but portions of the list in the public court file include endometriosis and conditions affecting the jaw, breast or female genital tract.
The employees, who comprise the four-member team that reviews claims, described how the reviews were conducted and said Blue Cross kept monthly reports of its cancellations.
Blue Cross parent company WellPoint denies wrongdoing. The allegations are being investigated by the Department of Insurance and the Department of Managed Health Care (Los Angeles Times, 4/26).