Controversy Over Health Insurance Coverage Cancellations Continues
Health insurers could face additional legal action over allegations of improper policy cancellations in California, and state regulators continue to draw criticism for not ordering insurers to reinstate coverage in some cases, the Los Angeles Daily Journal reports.
For example, Los Angeles City Attorney Rocky Delgadillo is expected to announce a lawsuit today against Anthem Blue Cross, formerly Blue Cross of California, for violations related to individual health policy cancellations.
The Department of Managed Health Care levied a $1 million fine against the insurer last year over the cancellations. DMHC regulates HMOs in California.
Despite the fine, the agency has come under fire for not ordering the health plan to reinstate coverage in some of the cases. Last week, Consumer Watchdog, an advocacy group, sent a letter urging DMHC to force Anthem Blue Cross to reinstate coverage for 90 dropped members.
Jerry Flanagan, health policy director of Consumer Watchdog, said DMHC is legally required to intervene and reinstate the policies. He also wrote in a letter to DMHC, "If your decision is to not order immediate reinstatement, please respond by providing specific statutory authority for that decision" within 10 days.
Lynne Randolph, a spokesperson for DMHC, said regulators can only reinstate patients if they petition as individuals. She added that reinstatement of individual patients was not the purpose of the department's 2007 investigation of Blue Cross.
Randolph also said the department will release its final report and include recommendations for patients who have lost their health coverage in the coming weeks.
In addition, settlement negotiations involving two class action lawsuits also began Tuesday before Los Angeles Superior Court Judge Peter Lichtman (George, Los Angeles Daily Journal, 4/16).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.