Blue Shield of California Sues Monarch HealthCare for Denying Care to Patients

Blue Shield members turned away by Monarch physicians, told to switch health plans

WOODLAND HILLS, Calif., Feb. 29, 2012 /PRNewswire-USNewswire/ -- Blue Shield of California today announced that it is suing Monarch HealthCare for breach of contract after Monarch refused to treat Blue Shield members, among other wrongful actions. Blue Shield seeks damages of no less than $10.5 million for both lost profits and loss of goodwill due to actions taken by Monarch.

Blue Shield had contracted with Monarch, the largest Independent Physicians Association (IPA) in Orange County, for a number of years to provide care to Blue Shield's Medicare Advantage and commercial HMO members. At the end of 2009, Blue Shield and Monarch entered into a new provider agreement effective Jan. 1, 2010 for a term of three years.

According to a demand for binding arbitration filed with the American Arbitration Association, Blue Shield states that Monarch committed multiple breaches of contract, including agreeing to be acquired by UnitedHealth Group without Blue Shield's consent, soliciting Blue Shield members to switch health plans and refusing to treat Blue Shield members.

"Monarch actively steered our members away from Blue Shield and violated its contractual obligations to care for these members while our agreement was in full effect," said Juan Davila, senior vice president for network management, Blue Shield of California. "We are seeking damages for the significant loss and harm we suffered."

Due to the breach of contract that occurred when Optum (a United subsidiary), acquired Monarch, Blue Shield notified Monarch that it will terminate its commercial HMO and Medicare Advantage contracts effective May 1, 2012. Blue Shield is working to minimize disruption to members and will assist members and customers in the transition.

About Blue Shield of California

Blue Shield of California, an independent member of the Blue Cross Blue Shield Association, is a not-for-profit health plan with 3.3 million members, 4,800 employees, and one of the largest provider networks in California. Founded in 1939 and headquartered in San Francisco, Blue Shield of California offers a wide range of commercial and government products throughout the state. The company has contributed more than $125 million over the past four years to the Blue Shield of California Foundation—which was named one of BusinessWeek's 20 most generous corporate foundations.  For additional information, visit

CONTACT: Steve Shivinsky
Corporate Communications
(415) 229-5447
[email protected]

SOURCE Blue Shield of California