Is Blue Cross Asking Doctors To Help Them Rescind Coverage?

Article: Is Blue Cross Asking Doctors To Help Them Rescind Coverage?

That’s what many doctors think. Blue Cross of California has been sending copies of patients’ health care insurance applications to doctors advising them to contact Blue Cross if they notice that information contained on patients’ applications doesn’t match what patients tell their doctors.

Doctors Outraged

According to a recent article in the Los Angeles Times, doctors are outraged by Blue Cross of California’s behavior. The Times quoted Dr. Richard Frankenstein, President of the California Medical Association (CMA), as saying, “We’re outraged that they [Blue Cross] are asking doctors to violate the sacred trust of patients to rat them out for medical information that patients would expect their doctors to handle with the utmost secrecy and confidentiality.”

Agencies are watching

California’s insurance and health care agencies are reportedly watching Blue Cross’s latest antics. The CMA forwarded the letter to the California Department of Managed Health Care (DMHC) and Steve Poizner, California’s Insurance Commissioner – whose office told the Times that Blue Cross is now ‘on their radar’.

That might not be the best thing for Blue Cross right now as Poizner and the DMHC have warned insurers to stop their illegal and careless practices over and over again. Poizner has said that his office will be targeting California’s largest insurers in upcoming market conduct examinations and will come down on insurers ‘like a ton of bricks’ in 2008. Blue Cross is sure to be on that list after the fines it received in 2007 – nearly $1.3 million worth. One, in particular, stands out:

In March 2007, the DMHC fined Blue Cross of California $1 million for illegally rescinding health insurance policies and for not conforming to state law. After reviewing case documents, the DMHC found that:

In nearly every case, Blue Cross did not prove that policyholders willfully misrepresented their medical histories before coverage was rescinded.
In half of those cases, Blue Cross did not conduct a thorough and complete pre-enrollment investigation of applicants’ medical histories (or even to its own underwriting policies) before issuing coverage.

Blue Cross has denied that there is anything wrong with asking doctors to take on the role of underwriters and pointed to the fact that doctors aren’t required to participate.

Critics of insurers, such as Blue Cross, say that these companies seem to spend more time finding ways to cancel insurance than they do paying claims. Whether or not that’s true, the fact remains that insurance companies must deal with their policyholders fairly and in good faith. If your insurer has acted in bad faith, contact an attorney whose practice focuses in this area of law. For a free, no-obligation consultation with a qualified attorney, please click here.