Anthem Blue Cross in California will pay $6 million to settle allegations that it wrongly terminated certain members after they became sick and needed care.
The settlement ends a lawsuit filed in 2008 by the city of Los Angeles, which claimed Anthem was illegally using rescission policies by investigating members' medical histories for inconsistencies with their applications after they filed claims, the Associated Press reported.
"Patients with health insurance have a right to expect meaningful coverage when they need it most, when they are ill and in need of medical treatment," City Attorney Carmen Trutanich said in a statement. "Health insurance companies must honor their policies and provide coverage to patients in full compliance with the law."
When the case was originally filed, then-City Attorney Rocky Delgadillo sought $1 billion in fines and restitution from Anthem. He claimed some of the members Anthem dropped were elderly and patients with health costs of more than $100,000, the AP noted.
Anthem denied any wrongdoing and said it has since taken several steps, including amending its insurance application and obtaining third-party reviews for dropped policies, to ensure it complies with all rescission laws, reported the Los Angeles Times.