BC of California faces hearing on complaints

Over the past three years the state of California has logged more than 1,600 consumer, physician and hospital complaints about Blue Cross of California (BCC) business practices. Sparked by these complaints, the state's Department of Managed Health Care (DMHC) now plans to hold a public hearing to look at whether the Blue plan has kept promises it made when it was acquired in 2004 by WellPoint. The hearing, which will take place next week, follows a Department of Insurance report contending WellPoint unit BC Life & Health improperly revoked nearly 2,000 individual policies in 2004 and 2005.

When WellPoint acquired Blue Cross of California in 2004, state regulators made WellPoint promise it wouldn't use BCC's premium revenues to pay for the acquisition or finance executive payouts. (Regulators and critics were unhappy about a planned executive payment of up to $600 million.) Now, the plan is cutting physician fees while raising premiums, according to the California Medical Association. The DMHC also is scrutinizing a $950 million payment BCC made to WellPoint this spring to determine whether the payment violates the terms of the buyout deal.

To find out more about the hearing:
- read this Los Angeles Times piece

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