Consumer group sues Anthem for 'bait and switch' of narrow-network plans

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A consumer advocacy group has filed a class-action complaint against Anthem Blue Cross, alleging the insurer automatically renewed preferred provider organization (PPO) plans for California consumers without informing them of new coverage changes.

According to the complaint filed by Consumer Watchdog earlier this week, Anthem engaged in a "bait and switch" scheme by automatically renewing PPO coverage for Affordable Care Act exchange consumers in California, but replacing it with an exclusive provider organization plans that include a much narrower network of providers and “no out-of-network care whatsoever.” The complaint notes that even though the plans have significantly less coverage, premiums will increase 33 percent.

Throughout the state, premiums on plans sold through the Covered California exchange will increase 13.2 percent.

Consumer Watchdog has filed similar claims against various insurers in previous years, including a 2011 suit against Anthem, and a 2014 complaint against Cigna and Blue Shield of California arguing plans offered inadequate networks.

“In an effort to retain its market share, Anthem is failing to adequately inform its members that they are losing out-of-network benefits for 2017,” Laura Antonini, staff attorney for Consumer Watchdog, said in an announcement.

An Anthem spokesperson told the Los Angeles Times the lawsuit “is without merit,” adding that the plans were approved by state regulators, and consumers were sent notices informing them of the change.

Anthem Blue Cross reported this week that it saved more than $70 million by leveraging predictive analytics in its accountable care organizations to improve care for PPO members with two or more chronic conditions. Meanwhile, Blue Shield of California announced it will issue more than $25 million in rebates tied to the Affordable Care Act’s medical loss ratio provision.