Blue Cross Sued for ‘Bait & Switch’ Misrepresentations of Doctor and Hospital Networks, and Delaying Enrollment in Affordable Care Act Plans

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Santa Monica, CA – Blue Cross vastly misrepresented the size of its physician and hospital networks and other key health plan contract terms in order to increase sales during the Affordable Care Act’s ‘open enrollment period’ that ended on March 31, according to a new California class action lawsuit filed by Blue Cross customers and consumer advocates.

“Blue Cross used false information about its provider networks, deductibles, and other key terms of its coverage to trick consumers into enrolling in the company’s new health plans,” said Laura Antonini, staff attorney for Consumer Watchdog. “Blue Cross also collected premium payments from many consumers for months without providing consumers with proof of coverage, preventing them from accessing medical treatments and services. Additionally, Blue Cross is operating a customer service telephone system that virtually guarantees consumers will remain in the dark about their plans by subjecting them to incredibly long hold times and dropped calls.”

Click here to download the new class action lawsuit:

The new lawsuit filed by attorneys for Consumer Watchdog and Shernoff Bidart Echeverria Bentley LLP, and a related case filed by the Law Offices of Scott C. Glovsky APC, targets Blue Cross’s misrepresentations of its ‘provider’ networks of doctors and hospitals.  The lawsuits allege that Blue Cross misrepresented so-called “Exclusive Provider Organization” aka “EPO” health plans that are similar to HMOs, with no out-of-network coverage and benefits, as Preferred Provider Organization (“PPO”) plans, which provide out-of-network coverage and benefits.

Additionally, the Consumer Watchdog and Shernoff Bidart Echeverria Bentley LLP lawsuit announced today alleges that Blue Cross violated California laws by:

•    Subjecting consumers to inadequate networks of physicians and hospitals, causing delays and interruptions in accessing needed health care;
•    Misrepresenting and concealing that its new PPO plans imposed much higher deductibles for out-of-network providers than advertised for the plans.  As a result, consumers must pay far more out-of-pocket before Blue Cross pays for medical care;
•    Delaying consumers’ enrollment in new health plans for months, effectively blocking access to physician and hospital services, even though Blue Cross collected consumers’ premiums; and
•    Subjecting consumers to exceedingly long wait times, regularly lasting several hours, on customer service telephone lines when consumers called to address these problems and misrepresentations.

“We believe that Blue Cross took advantage of consumers during the recent open enrollment period,” said lead counsel Michael J. Bidart. “They sold new ACA-compliant health plans as being comparable to existing Blue Cross products, but they did not tell consumers that the new plans only had access to an extremely limited network of providers; they misrepresented EPO coverage as PPO coverage; and they concealed high out-of-network deductibles. Both new and existing customers feel completely misled.”

The Consumer Watchdog and Shernoff Bidart Echeverria Bentley LLP lawsuit seeks to require Blue Cross to establish sufficient provider networks and administer health plans in compliance with California law, and demands reimbursement of money paid by consumers as a result of Blue Cross’s illegal acts.

“I believed I had purchased a PPO plan but only found out at my son’s initial doctor’s appointment that Blue Cross had sold me an EPO plan, which is really just an HMO with no out-of-network benefits,” said Betsy Felser, M.D. of Los Angeles California, one of the Blue Cross customers representing other consumers in the class action lawsuit.  “I had even specifically confirmed that my son’s longstanding Blue Cross in-network pediatrician was still in-network, but only found out after-the-fact that I was given misinformation by Blue Cross, which had suddenly removed my son’s doctor from its new narrow network.  I feel this was dishonest and dangerous to people like me who are now struggling to find physicians and gives us no peace of mind and no coverage if we get sick, which is the whole purpose of buying health insurance in the first place.”

According to the lawsuit announced today, “Once Plaintiffs and Class Members enrolled in the new Blue Cross plans, they soon found out that their provider networks did not include the providers Blue Cross had represented as in-network. By changing the providers who were in-network after Plaintiffs and Class Members purchased the health service plans, Blue Cross deprived these enrollees of providers that Blue Cross had represented as in-network. Due to Blue Cross’s actions and misrepresentations, Plaintiffs and Class Members are not able to fully access plan benefits:

•    Promised providers are not in-network;
•    Negotiated fee schedules are not available;
•    Payments made to out-of-network providers in EPO plans do not accrue toward Plaintiffs’ and Class Members’ annual deductibles; and,
•    PPO plans impose much higher deductibles for out-of-network providers than advertised for the plans.”

Consumers did not fully learn of the misrepresentations until after the open enrollment period ended on March 31.  Therefore, consumers are stuck with their inadequate coverage and unexpected medical bills until they can switch plans during the next open enrollment period.

The Consumer Watchdog and Shernoff Bidart Echeverria Bentley LLP lawsuit, Felser, et al. v. Blue Cross of California (Case No. BC550739), was filed in Los Angeles County Superior Court.  A related lawsuit, Cowart v. Blue Cross of California (Case No. BC549438), was previously filed in Los Angeles Superior Court by the Law Offices of Scott C. Glovsky, APC.

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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

Shernoff Bidart Echeverria Bentley LLP leads the nation in protecting policyholders from insurance company abuse. The firm has been protecting the rights of insurance consumers, both individuals and businesses, for over 35 years after having set the legal precedent requiring insurance companies to act in good faith. For more information, go to:

The Law Offices of Scott C. Glovsky, APC is nationally recognized as an advocate for the rights of children and needs of the insured. The firm’s insurance bad faith class action lawsuits against health insurance companies have helped millions of Los Angeles and Southern California patients gain access to behavioral therapies. For more information, go to:

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