Anthem Blue Cross

WellPoint proceeds with $11.8M settlement with hospitals, despite dropouts

Anne Zieger — Mon, 08 Sep 2008 04:17:37 -0400

Though nearly 20 percent of the hospitals it approached have decided not to participate, WellPoint subsidiary Anthem Blue Cross of California is proceeding with its $11.8 million class action settlement with the California Hospital Association. The settlement pays hospitals for claims related to patients whose policies were retroactively canceled, establishing an $11.65 million fund to pay hospitals for services to members, and a $150,000 fund for patients who paid some or all of the bill after their policies were canceled. The hospitals, for their part, will agree not to make any further attempts to collect from the patients.

While the majority of California Hospital Association members went for the deal, three entities opted out. Sutter Health, Catholic Healthcare West and St. Joseph Health System decided not to participate. Sutter said that the deal was not in the best interest of its affiliate hospitals; St. Joseph said it wanted to resolve the issue without going to court; and CHW said that it plans to proceed with its own suit against Anthem to collect money owed to its facilities. Collectively, the three entities represent 74 hospitals, or less than one-quarter of the Association's membership.

To learn more about the settlement:
- read this Sacramento Business Journal article

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Blue Shield of CA fires broker for selling CDHP with funding

Anne Zieger — Mon, 08 Sep 2008 03:42:16 -0400

In recent times, health plans in California have started to warn their brokers that it wasn't kosher to sell high-deductible plans with other forms of insurance or funding to cover the deductible. Now, Blue Shield of California has terminated a broker for taking just such an action, a move that is now being scrutinized by the state's Department of Insurance. Southern California broker Bill Goldstein was terminated by Blue Shield last month for selling a small employer a $3,000-deductible Blue Shield plan, presumably along with some other form of financing designed to help employees meet their obligations.

Several plans, including Blue Shield of California, Health Net, Kaiser Permanente and Anthem Blue Cross, have sent letters to insurance brokers threatening to terminate the broker's contract and withhold commissions if brokers sell so-called "wrap-around" packages to employers. Brokers, some of whom have been protesting such policies, say that all they're doing is helping their clients provide a policy that both employers and employees can afford. The health plans, meanwhile, say that the high-deductible plans don't make money unless consumers are forced to bear the initial cost of care and make careful decisions. None of the plans, however, have released figures indicating how high-deductible plans perform when consumers don't bear all of the first-dollar coverage, according to the Sacramento Business Journal.

To learn more about the dispute:
- read this Sacramento Business Journal article

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Health plans upset when employers help pay high deductibles

Anne Zieger — Mon, 25 Aug 2008 09:31:22 -0400

High-deductible health plans have been an extremely trendy idea of late, with the assumption being that consumers would use services more cautiously if they had to pay first-dollar coverage on their own. However, some employers have been muddying the waters a bit by buying high-deductible plans, then helping employees with the deductibles through their own payouts or added insurance coverage. The combined package may be as much as 40 percent cheaper than traditional coverage, while offering comparable benefits, according to one estimate for a 40-person business based in California.

Employers like this approach, which brokers have fostered in an effort to win their business. But lately, some health plans have raised a stink over this model, which they say can push costs up substantially by taking away employees' incentive to overuse services. In fact, some California plans are so upset that they're asking employers to sign statements saying that they won't combine high-deductible plans with some types of self-insurance. Employers who won't sign could lose coverage. "Wrap-around schemes really run the risk of destroying lower-premium health products by driving up the price or making them go away completely," says Chris Ohman, president and CEO of the California Association of Health Plans.

To date, Blue Shield, Health Net, Kaiser Permanente and Anthem Blue Cross have sent letters to insurance brokers threatening them with termination of their contract and loss of commissions if they sell so-called "wrap-around" packages. I doubt they're the last.

To learn more about this trend:
- read this Sacramento Business Journal piece

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CA residents to get renewed health coverage

Anne Zieger — Wed, 13 Aug 2008 13:58:40 -0400

About 3,400 California consumers whose individual policies were improperly revoked will soon get invitations to rejoin their health plan. The letters are being sent out as part of a batch of settlements recently announced between the state's Department of Managed Health Care and a handful of health insurers. Health plans issuing the letters include Health Net, Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente and PacifiCare, which have reached settlements over their rescission practices that included fines totaling $14 million.

The Department of Managed Health Care has ordered health plans to provide the agency with contact information for hundreds of members with rescinded policies to make sure that the members do indeed get their notices. Meanwhile, the DMHC, the state attorney general's office and health literacy experts have reviewed the noticed to make sure they'll be easily understood by consumers.

What's noteworthy, however, is that despite the fines and reinstatement of consumers, California health plans have not generally conceded that post-facto rescissions are are illegal. Most have gone into settlements screaming loudly that they'd violated no laws, despite the DMHC's firm conviction that they had. All told, it seems that even with laws on the books with arguably ban rescissions for innocent mistakes on applications, the practice is far from dead. There's more controversy to come on this issue, without a doubt.

To learn more about the reinstatements:
- read this Modern Healthcare piece

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L.A. sues Blue Shield of CA over cancellations

Anne Zieger — Thu, 17 Jul 2008 11:26:28 -0400

Engaging in yet another battle with the state's health plans, Los Angeles City Attorney Rocky Delgadillo has filed a lawsuit contending that Blue Shield of California illegally canceled the policies of hundreds of beneficiaries. This move follows a number of similar actions by state and local officials, including a similar suit Delgadillo filed earlier this year against Anthem Blue Cross and million-dollar fines against various health plans by the state Department of Managed Health Care. Regulators contend that the practice of rescinding policies for such innocent mistakes, known as rescission, is illegal under state law. Health plans, meanwhile, maintain that they're merely rooting out fraud.

In the current suit, Delgadillo argues that the plan has illegally canceled coverage of more than 850 policyholders. It asserts that the plan uses confusing applications to trick individual applicants into making innocent mistakes, then uses the mistakes to cancel policies when medical bills get high. Delgadillo is seeking fines and penalties totaling of more than $1 billion.

To learn more about the suit:
- read this Los Angeles Times piece

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WellPoint pays hospitals $11.8M to settle bills from rescissions

Anne Zieger — Tue, 08 Jul 2008 11:29:43 -0400

Leading health plan WellPoint has agreed to pay $11.8 million to settle claims with hundreds of hospitals that it failed to pay after it dropped patients after treatment. WellPoint was sued by about 480 hospitals after it refused to pay them when it dropped policies of individual policyholders. The health plan had dropped these policyholders, it said, because the patients made mistakes on their applications or had pre-existing conditions. The patients, for their part, said that WellPoint subsidiary Anthem Blue Cross had improperly investigated their medical histories for evidence of such conditions after they'd submitted costly medical bills.

In their case, the hospitals said that Anthem should pay, given that the health plan authorized the care for patients who, at the time of treatment at least, were members in good standing. The fact that Blue Cross dropped the patients later had no bearing on the plan's obligation to pay these bills, the hospitals argued. Now, the hospitals will be reimbursed for these bills. As part of the settlement, they've agreed to stop trying to collect these bills from the patients.

Anthem (and WellPoint's) legal troubles on this front are far from over, however. It still faces a separate class-action suit from the state's doctors over unpaid bills for patients with canceled policies. There's also a class-action pending that was filed on behalf of more than 6,000 patients whose policies were canceled since 2001. Meanwhile, the state's Department of Managed Health Care is considering piling on more fees, having already imposed a $1 million fine last year after it concluded the rescissions were illegal. The new fines could be as much as $200,000 per violation on about 1,700 disputed cancellations.

To learn more about these legal issues:
- read this Los Angeles Times article

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PacifiCare restores canceled policies

Anne Zieger — Fri, 20 Jun 2008 11:51:13 -0400

Health plan PacifiCare of California has agreed to restore coverage to consumers whose individual policies, the state says, were canceled unfairly. Under the terms of its agreement with state's Department of Managed Health Care, the health plan will offer coverage to three consumers whose coverage was canceled within the last four years, and stand ready to reimburse for past medical claims. The health plan will also offer coverage to 57 former members, as well as expedited dispute resolution for claims. In addition, PacifiCare has agreed to pay a $50,000 fine and agree to a corrective action plan. It must comply with the corrective action plan within one year or face another fine of $500,000.

In settling with the state, PacifiCare is following in the footsteps of Kaiser and Health Net, both of which were slapped with fines of $300,000, and potential added fines of $3 million, over charges that they rescinded coverage inappropriately for members with individual policies. The state has also offered settlements to Blue Shield and Anthem Blue Cross, which are pending.

To learn more about the state's actions:
- read this Sacramento Business Journal article

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OH plans, providers share pricing and quality information

Fri, 23 May 2008 06:59:55 -0400

This week seems to be a big one for transparency. Not only did Cigna roll out its nationwide physician and hospital rankings program nationwide, central Ohio got into the action, too. Anthem Blue Cross and Blue Shield in Ohio has published pricing information on medical procedures on a site accessible only to its members this week. Anthem's tool tells members what's paid to providers after contract discounts for 39 common elective procedures.

The move follows similar steps by providers, for example, local health system OhioHealth, which began publishing CMS data on patient care and satisfaction a couple of weeks ago. Also, OSU Medical Center published its data from CMS in late March, with Nationwide Children's Hospital planning to follow up with its own data this summer.

Aetna, meanwhile, has offered its members price information for physicians in central Ohio since 2006, along with a system rating doctors with stars, as well as by rates of patients readmitted to hospitals within 30 days after discharge.

To learn more about transparency in central Ohio:
- read this Business First of Columbus piece

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Kaiser, Health Net agree to reinstate 1,200 beneficiaries

Fri, 16 May 2008 06:59:58 -0400

Two of California's largest health plans have agreed to reinstate a total of roughly 1,200 patients whose policies were rescinded after they began incurring high medical expenses.

Under the terms of a settlement brokered by the California Department of Managed Health Care, patients whose insurance was rescinded by Kaiser Permanente or Health Net since 2004 will be allowed to buy a new policy regardless of their medical condition. As part of the deal, Kaiser has agreed to pay a $300,000 fine to the state without admitting wrongdoing, as well as making procedural changes which include developing simpler coverage applications to avoid applicant mistakes. The deal follows a $9 million judgment against Health Net won by a hair salon owner when the plan canceled her coverage while she was undergoing chemotherapy.

The Department of Managed Health Care is now trying to reach similar deals with other major health plans, including Anthem Blue Cross, Blue Shield and PacifiCare, which involve about 4,000 canceled policies.

To learn about the health plans' new deal:
- read this Los Angeles Times article

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