A Los Angeles Superior Court judge on Tuesday denied an emergency request to stop Anthem from allegedly switching some California members out of their preferred provider organization plans and into new plans with significantly worse coverage without proper notice.
Consumer Watchdog, a Santa Monica, Calif.-based consumer advocacy organization, late last month requested a temporary restraining order and filed a class action on behalf of PPO members alleging that Anthem is orchestrating a “bait and switch” scheme by automatically moving members into exclusive provider organization plans with no coverage for out-of-network services.
The judge denied the request because the plaintiff was not deceived and did not lose money or property as a result of Anthem's alleged misconduct, a court document stated.
Still, according to Consumer Watchdog attorney Laura Antonini, the court said Anthem conceded to violating the federal law by illegally discontinuing the PPO plans and attempting to replace them with EPO plans. An Anthem spokesman denied that anything was conceded and said the case was without merit.
“Anthem Blue Cross is pleased with the court's decision and based on the facts in the case, we believe the decision is appropriate,” the company said in a statement Tuesday.
Antonini said Consumer Watchdog is evaluating its next steps.
According to the class action complaint, despite telling PPO members with comprehensive coverage for out-of-network services they would automatically be enrolled in similar coverage for 2017, Anthem is instead moving them into plans with no out-of-network coverage—potentially putting members at risk for big out-of-network medical bills that would have been covered under their current plan.
Moreover, the lawsuit said Anthem is deliberately misleading its plan members about their new coverage.
“Anthem knows that if consumers were informed that coverage was being withdrawn from the market and replaced with entirely different coverage as the law requires, consumers would take a closer look at their options, including health plans offered by other companies,” the complaint said.
The plaintiff, Paul Simon, who is represented by Consumer Watchdog attorneys, is enrolled in an individual Anthem PPO plan for 2016. At the end of September, Simon received a “renewal” packet Anthem sent to PPO plan members stating that their coverage is still being offered for 2017, though some details have changed. The packet said members would be automatically enrolled in similar coverage if they didn't take action by Dec. 15.
But according to the complaint, the renewal packet in most places fails to clearly disclose that members will lose out-of-network benefits.
In mid-October, Anthem sent a short correction to its PPO plan members acknowledging they would be moved to a new plan that no longer covers out-of-network providers except for emergency and urgent care. The one-page correction arrived in a nondescript envelope “intended to further disguise the true nature of the 2017 health plans,” the lawsuit said.
The lawsuit argued that federal law prohibits Anthem from switching members into entirely new network types. If the insurer wants to change the network type, it must discontinue the plan and issue a notice. Because Anthem has failed to issue a timely discontinuation notice, it must offer its PPO plan members their existing coverage for 2017, the complaint said.
The class action was initially filed October 31 in the Superior Court of the State of California in Los Angeles.