California MDs file suit against BC of California

The California Medical Association is mad as hell, and they're not going to take it anymore. Last week, the group began a campaign to bring patients into its class action lawsuit against Blue Cross of California. The suit, originally filed by a group of individual policyholders, alleges that Blue Cross of California has engaged in a pattern of dumping policyholders after approving expensive treatments, then refusing to pay the bills for those treatments. The state hospital association has also filed a motion asking to join the suit.

This suit is just the most recent in a series of legal assaults on this issue for the health insurer. In October, Blue Cross settled dozens of similar claims, and in September, the state's Department of Managed Health Care fined Blue Cross $200,000 after finding that the health plan had illegally revoked a Southern California woman's policy.

Blue Cross of California is just the most recent in a series of health plans targeted for allegedly dumping individual policy holders, using state rules in a way opponents say is unfair and contrary to the laws' intent. These insurers contend that they have the complete right to cancel coverage at any time if important information is left off an application or reported incorrectly, even if the inaccuracies were reported by mistake. Opponents, meanwhile, say that the plans aren't following a 1993 law requiring plans to drop coverage only when they can prove "willful misrepresentation" of the law. The state's Department of Managed Health Care will hold hearings on this subject at the end of January, after which it should release a rule clarifying the circumstances under which health plans can drop individual policy holders.

To get caught up on this issue:
- read this Los Angeles Times article

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