Blue Cross of California Improperly Canceled Health Insurance Policies, State Investigation Finds
Blue Cross of California improperly canceled individual health insurance policies after some members became pregnant or sought medical treatment for chronic conditions, an investigation by the California Department of Managed Health Care has concluded, the Los Angeles Times reports. DMHC officials on Thursday informed Blue Cross of their intent to file an accusation against the company and issue a $1 million fine in the case. Under California law, health insurers must prove that members intentionally misrepresented their medical histories on policy applications to cancel policies. State investigators reviewed 90 cases from 2004 to 2006 in which Blue Cross canceled individual health insurance policies and found the company had violated the law in each case. According to state investigators, Blue Cross used computer programs and maintained a department to review the policies of members with chronic illnesses and women who became pregnant to consider cancellation. Blue Cross cancels about 1,000 policies annually in California. WellPoint, the parent company of Blue Cross, cited "factual errors" in the investigation and said the "vast majority" of policies canceled by the company are proper. Shannon Troughton, a spokesperson for WellPoint, said that Blue Cross will have an opportunity to respond to the allegations before DMHC formally files an accusation against the company and issues the fine. DMHC Secretary Cindy Ehnes said that the department plans to open similar investigations of Kaiser Permanente, Blue Shield of California, Health Net and PacifiCare (Girion, Los Angeles Times, 3/23).
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