Blue Cross Workers Say Policies Canceled For Mistakes
By Associated Press - May 4, 2006LOS ANGELES (AP) _ Blue Cross employees testified that California's largest health insurer routinely canceled policies of people who made misstatements on their claims, even accidentally, it was reported Thursday.
"We just look at whether the condition was disclosed on the application," not whether the omission was willful, employee Cynthia Rosenfeld testified last year in a deposition for a lawsuit.
Experts said state law prohibits retroactive cancellations unless there is evidence that the person receiving treatment lied or failed to disclose a pre-existing condition.
Another employee testified that claims for treatment of certain illnesses, including diabetes and cardiovascular disease, triggered reviews by a four-member team that reviewed as many as 1,500 policies a week, according to the Los Angeles Times.
"When a claim comes in and there is a certain diagnosis, that would pretty much (consign) them to be reviewed for a possible pre-existing condition. There is a list," employee Sheila Millan testified.
The depositions were sealed by a judge but portions appeared in the public court file, the Times said.
The suit and 10 others filed in March allege that Blue Cross had a "retroaction review" department specifically to cancel policies for patients who already had received permission for medical treatment.
Patients were left to pay their hospital bills, some exceeding $100,000, according to the lawsuits, which were filed on behalf of former patients in Los Angeles, Orange, San Bernardino and Riverside counties.
California regulators are investigating two units of Blue Cross in connection with the allegations.
On Thursday, another 10 lawsuits were filed against Blue Cross companies in Superior Court, along with three suits that named another insurer, Blue Shield of California.
All allege that the insurers used inadvertent errors in claim applications as an excuse to drop patient coverage and avoid paying costly medical bills.
At a news conference Thursday, Blue Cross patient Michael Norris said he got pre-approval last year for a throat surgery for his 4-year-old son, Kyle, but about six months later Blue Cross rescinded his son's coverage and left the family with $15,000 in medical bills.
"It's outrageous that health insurers dump policyholders that cost them too much money," Norris said.
Another suit contends that Parvin Mottaghi was left with about $100,000 in medical bills after Blue Shield rescinded her coverage in March following heart surgery even though the operation was pre-approved.
"We are unaware of the lawsuits and we have not seen any documents" and therefore cannot comment, said Elise Anderson, a spokeswoman for Blue Shield of California, told The Associated Press on Thursday.
A spokesman for Blue Cross's parent company declined to speak directly about the lawsuits but denied wrongdoing.
"Blue Cross of California does not rescind policies based on diagnosis or treatment. We rescind policies based on fraud and/or misrepresentation. We feel that we are in full compliance with our legal obligations to our members" and with California law, Robert Alaniz, a spokesman for WellPoint Inc. of Indianapolis, told The Associated Press. | 
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