California Regulators Schedule Hearing on Blue Cross Allegations
Department of Managed Health Care officials on Tuesday announced plans to hold a public hearing on July 19 to determine whether Blue Cross of California has violated terms of a 2004 agreement that the insurer and its parent company WellPoint made with the state, the Los Angeles Times reports. The agreement was made as part of WellPoint's merger with Indianapolis-based Anthem.
DMHC officials say they have received more than 1,600 complaints from policyholders, physicians and hospitals about Blue Cross since the 2004 acquisition.
Karen Nikos, spokesperson for the California Medical Association, said Blue Cross this summer is imposing fee reductions on physicians and notifying policyholders that premiums will rise due to increasing medical expenses.
DMHC Director Cindy Ehnes said, "We must have assurances that Blue Cross' No. 1 goal is to provide quality health care -- not simply to increase its profitability."
Shannon Troughton, WellPoint spokesperson, said the company would send representatives to the hearing.
The department also is investigating whether a $950 million payment made this spring by Blue Cross to WellPoint violates the terms of the 2004 agreement (Girion, Los Angeles Times, 7/11).
DMHC in March fined Blue Cross $1 million for failing to ask policyholders about application errors before revoking coverage. The insurer now has agreed to notify policyholders before any decisions (California Healthline, 5/11).