California Regulators Investigate Blue Cross Cancellation Practices
The Department of Managed Health Care launched an investigation into Blue Cross of California's health insurance policy cancellation practices after receiving complaints from the California Medical Association and individual physicians two weeks ago, Capitol Weekly reports.
The complaints were about letters that Blue Cross had sent to physicians asking them to identify pre-existing medical conditions that new members might have omitted on applications for coverage. The letters drew widespread criticism, prompting Blue Cross to announce that it had stopped sending such letters.
DMHC spokesperson Lynne Randolph said the agency is investigating two potential violations:
- Basing medical decisions on financial concerns; and
- Canceling health insurance coverage after a claim has been submitted.
Blue Cross said it is in regular contact with DMHC, but a spokesperson did not comment on the specifics of the investigation, Capitol Weekly reports (Howard/York, Capitol Weekly, 2/25).
DMHC wants to restrict health insurance companies from canceling policies after members file claims, a practice the industry maintains is necessary to control fraud, KQED's "The California Report" reports.
A bill by Assembly member Hector De La Torre (D-Los Angeles) would require health plans to get approval from state regulators before canceling a policy.
The segment includes comments from:
- DMHC Director Cindy Ehnes; and
- Chris Ohman, president and CEO of the California Association of Health Plans (Varney, "The California Report," KQED, 2/26).