State Regulators To Investigate Blue Cross
State regulators on Wednesday said they would investigate allegations that Blue Cross of California systematically cancels coverage retroactively for members who need costly care, the Los Angeles Times reports (Girion, Los Angeles Times, 3/30).
On Monday, 10 former Blue Cross and Blue Cross Life & Health members filed lawsuits alleging that the insurer operates a "retroactive review department" that examines members' records to find medical information that was not disclosed on members' applications. The plaintiffs allege that Blue Cross uses that information as a reason to cancel the policy, although the discrepancies might be unintended or unrelated to the claim (California Healthline, 3/28).
Insurance Commissioner John Garamendi (D) said his office will investigate the allegations. He said, "If we see a pattern with Blue Cross Life & Health, they are in deep trouble." The Department of Insurance also is investigating whether Blue Cross' profits are excessive.
Department of Managed Health Care officials said they also will investigate the allegations and conduct an audit of the insurer's claims handling and policy cancellations.
Amy Dobberteen, DMHC's enforcement chief, said the audit will be a key in determining "the red flag" for Blue Cross "to do a focused investigation into an enrollee's medical history."
Blue Cross officials deny the charges and said they will cooperate with the investigations (Los Angeles Times, 3/30).