Wellpoint vs. Kaiser? More News On Policy Cancellations in CA

January 5, 2007

We recently wrote about Kaiser’s push to work with state regulators on developing “standards to protect its members from unfair cancellations” of health insurance coverage. This move puts Kaiser at odds with Wellpoint/Blue Cross of California and other major insurers, who contend that there is no problem and that the complaints they’ve received are politically motivated.

Wellpoint’s legal troubles in this area may be getting worse. (Wellpoint is Blue Cross of California’s parent company.) The Los Angeles Times writes:

California’s largest physician organization on Tuesday asked to join patients in a class-action lawsuit alleging that Blue Cross illegally dumps policyholders after authorizing expensive medical treatment and then refuses to pay the bills.

California’s hospitals have already filed a class-action suit, and asked that it be joined with the suit filed by Wellpoint members whose policies were cancelled.

What’s drawing these providers into the Wellpoint case are the unpaid bills for medical services rendered to these members before Wellpoint disenrolled them. Wellpoint contends that these members were not properly enrolled because they failed to disclose pre-existing medical conditions, and therefore it has no obligation to pay. The members – and now the doctors and hospitals – argue that Wellpoint use trivial arguments and faulty reasoning to disenroll these members and avoid paying the bills. Also at issue is California’s law protecting health plan members.

By implication, at least, Kaiser is suggesting that it agrees with the disenrolled members and these provider groups. That puts Wellpoint in a tough spot, and creates pressure to offer more concessions in the ongoing negotiations over this suit. It also suggests that similar negotiations with attorneys representing the doctors and hospitals may follow.

And politically, Kaiser may have just scored some points at its rival’s expense.

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One Response to “Wellpoint vs. Kaiser? More News On Policy Cancellations in CA”


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