Blue Shield sued for dropping policyholders
The Los Angeles city attorney has sued health care insurance provider Blue Shield for dropping policyholders (and allegedly doing so illegally) and “other deceptive practices.” The city attorney, Rocky Delgadillo, has already filed two other law suits against health insurance providers. The lawsuits all center around the practice of rescission — when a health insurance company drops an individual from having health care coverage after treatment has taken place, and then denies payment for the treatment to the physician, hospital, or other provider. Apparently, Blue Shield dropped more than 800 patients in this manner. The lawsuit is seeking $1 billion in fines and restitution for the rescission practices as well as “misleading advertising.”
Two weeks ago, California tried but failed to go after a one million dollar fine against a related business entity of Blue Shield called Anthem Blue Cross. According to a report from the Associated Press, regulators in California were “intimidated” by Anthem’s heavy-hitting legal team, but still plan to go after the company.
Apart from dropping people’s coverage, rescission is a huge penalty to providers and hospitals, as it leaves them on the hook for the services they provide. They’ve already billed the services, but now their claims for charges are rejected by the insurance company because the person is retrospectively dropped from coverage. Often, the provider will attempt to bill the individual, but the fact is that the service would have likely not been performed at all if the provider had known the individual was not covered. Alternatively, the provider might have tried to find a less expensive or different treatment for the patient if they thought the patient was paying out-of-pocket.
More states need to start standing up to unethical practices by the insurance behemoths. Insurance is only really insurance if it reduces risk and uncertainty and is there for covered individuals when they need it. If a policy can be revoked on a whim and past charges not covered, insurance companies are not holding up their end of deal which already is heavily in their favor.
There is no doubt that this is one of the biggest problems with our health care system. These insurance companies need to be brought to their knees and the playing field needs to be leveled in favour of the consumer/patient. Its bad enough that many people can’t afford insurance and now we have the insurance companies denying coverage. I think that until the political climate changes in this country we will continue to see this type of activity. There has to be a complete change of how insurance companies do business because we are dealing with peoples’ health and their lives. Corporations are entities that have no feeling or emotion for the individual because all they know is greed.
I find this situation really shocking and distressing. It’s really incomprehensible that insurance companies would suddenly drop an individual’s coverage due to his/her condition, and that they would refuse to pay for a treatment/procedure that had occurred while the individual was still covered. How could they ever justify that as an acceptable practice? It is bad enough that insurance companies are allowed to deny coverage of people with pre-existing conditions (thereby denying health care to those who need it most). When they start dropping people when they get sick and refusing to pay for their previous health care services, they really drop all premise of helping people obtain care and seemingly become ruthless, profit-driven organizations. It is also upsetting to hear that the Department of Managed Health Care avoided or delayed taking actions to challenge and rectify the rescissions of the insurance company because they found the company’s legal heft intimidating. That sends the message that an organization can do whatever it wishes and get away with it as long as they have enough money and power to bully everyone else into submission. This is an unacceptable situation! Our health care system is really in crisis when the sick and the poor are denied care and the very agencies that should be enforcing ethical and equitable practices are unwilling or incapable of righting the wrongs committed by insurance companies.