Blue Shield Sued Over Alleged Overcharging for Safety-Net Insurance
On Wednesday, Los Angeles resident Amalia Lample filed a lawsuit claiming that Blue Shield of California overcharged thousands of policyholders who purchased safety-net health care coverage, the Los Angeles Times reports.
The suit, which is seeking class-action status, relates to health coverage available under the federal Health Insurance Portability and Accountability Act. Under HIPAA, insurers must offer coverage to individuals who have lost their jobs or are ineligible for other coverage because of pre-existing conditions.
The suit argues that Blue Shield set its HIPAA coverage premiums higher than state-mandated maximum rates and falsely reported that its policies complied with official guidelines. It also contends that more than 6,000 Blue Shield policyholders have faced overly high HIPAA coverage charges since 2001.
Blue Shield, State Response
Blue Shield spokesperson Tom Epstein said the insurer had no immediate comment on the lawsuit. Blue Shield previously has said its HIPAA rates comply with state regulations.Lynne Randolph, spokesperson for the California Department of Managed Health Care, said it is difficult to determine when health insurers overcharge for HIPAA coverage because of ambiguity in the law's definition for calculating maximum rates. Randolph said DMHC is sponsoring state legislation to clarify regulations on maximum insurance rates (Helfand, Los Angeles Times, 7/8). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.