Hospitals Seek Payment From Blue Cross
A lawsuit filed on behalf of all California hospitals alleges that Blue Cross of California illegally cancelled patients' individual health insurance policies and refused to reimburse hospitals for medical services, the Los Angeles Times reports.
Coast Plaza Doctors Hospital in Norwalk filed the suit on Friday. The California Hospital Association is supporting the lawsuit, which seeks class-action status.
The suit alleges that when claims meet a certain dollar amount for a member with individual health insurance coverage, Blue Cross examines the member's medical records and looks for discrepancies in the application for reasons to revoke coverage.
Daron Tooch -- a lawyer with Hooper, Lundy & Bookman in Los Angeles, who is representing the hospitals -- said the exact amount of monetary losses from the cancellations is unknown because Blue Cross often denies payments with little explanation to the hospital.
Blue Cross says that its cancellations are intended to eliminate fraud and that it has the right to cancel individual policies for inadvertent errors and omissions on coverage applications.
Hospitals supporting the suit say state law requires insurers to pay for authorized care regardless of whether health insurance coverage is revoked.
The lawsuit seeks payment for all hospitals in such cases over the past four years, as well as interest and punitive damages. The lawsuit also seeks an injunction barring Blue Cross from continuing the practice (Girion, Los Angeles Times, 10/14).