Calif Insurance Regulator Launches Probe Into Blue Cross Units
By Associated Press - March 31, 2006LOS ANGELES (AP) _ California regulators are investigating whether two units of health insurer Blue Cross tried to boost profits by retroactively canceling the policies of several patients after they underwent costly medical treatments.
The state Department of Insurance is investigating Blue Cross Life & Health, while the state Department of Managed Health Care is looking into the allegations against Blue Cross of California.
The inquiries were prompted by lawsuits filed Monday by 10 former Blue Cross patients in Los Angeles, Orange, San Bernardino and Riverside counties.
"We are going to look into these allegations and determine whether or not these people whose policies were canceled were (treated) in a fair and appropriate manner," Norman Williams, a spokesman for California Insurance Commissioner John Garamendi, said Thursday.
Six of the lawsuits were filed against Blue Cross Health & Life and the other four against Blue Cross of California, Williams said.
In the complaints, the patients claim the Blue Cross units failed to pay their medical bills and dropped them from their coverage plans after authorizing treatment for breast cancer and heart disease, among other serious ailments.
Patients were left to pay their hospital bills, some exceeding $100,000, according to the lawsuits.
The decision to drop patients with expensive claims were made by a "retroactive review department" at the company that would scour patients' medical records for misstatements or omissions and use them as a pretext for Blue Cross to back out of paying medical bills, the lawsuits claim.
The patients also claim the company asked them to fill out a confusing medical history questionnaire designed to trick them into making errors that could be used later to drop them from coverage.
State law prohibits retroactive cancellations unless there is evidence that the person receiving treatment lied or failed to disclose a preexisting condition.
A phone message left after hours with Indianapolis-based WellPoint Inc., which owns the two California Blue Cross units, was not immediately returned Thursday.
WellPoint spokesman Robert Alaniz told the Los Angeles Times the company is in full compliance with the legal obligations to its members and denied any wrongdoing.
"Our policies and procedures with respect to claims reviews are designed to ensure that insurance premiums remain affordable for our members," Alaniz told the Times. "It's important that we issue policies based on accurate information filed by the member." | 
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