Suit Claims Blue Cross Misled Customers

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The class action says the insurer overstated the number of doctors and hospitals in its network to lure more people to buy plans under the Affordable Care Act.

A class action lawsuit filed Tuesday alleges that Anthem Blue Cross, one of California’s largest health insurers, sought to increase its market share under the Affordable Care Act by intentionally overstating the number of doctors and hospitals in its network and hiding the fact that in many cases it provided no coverage at all for care provided by medical professionals outside the network.

The lawsuit, filed by Consumer Watchdog, an advocacy group, and a Claremont-based private law firm, also claims that Anthem concealed “much higher” than advertised deductibles on out-of-network providers in its new PPO plans, and that it failed to provide insurance ID cards for two to three months, impeding access to medical care even after consumers had paid their premiums.

“Blue Cross had a clear incentive to conceal its reduced network” during the Affordable Care Act enrollment period that ran Oct. 1 to March 31, “in order to increase sales of its health service plans,” the lawsuit claims. “As a result of these practices, Blue Cross significantly increased its share of the California individual health service plan market while offering inferior products.”

Anthem Blue Cross spokesman Darrel Ng said that “while the vast majority of the listings were correct, there were some providers inadvertently listed.”

Anthem will honor claims submitted for care provided in the first three months of this year by doctors or hospitals inaccurately listed as being in the network, he said. Similar claims for service after March 31 will be handled on a “case-by-case basis.”

The lawsuit seeks compensation for all sums that consumers spent unnecessarily on medical care because of their confusion about who was in the network and who wasn’t, or because they were not informed that the plans they signed up for paid nothing for out-of-network medical care. It also seeks restitution of all premiums paid before ID cards were sent out, as well as punitive damages and other penalties.

Jerry Flanagan, a lawyer for Consumer Watchdog, said he had no specific estimate of the total monetary value of the lawsuit but that it “could be hundreds of millions of dollars.”

So far, six people – in Los Angeles, Orange, Sonoma and Santa Clara counties – are named in the complaint. However, “there are several hundred thousands of consumers in the affected Blue Cross health plans” who “will all be automatically part of the lawsuit,” Flanagan said.

Consumers in San Francisco filed a similar lawsuit in May against Blue Shield of California, another industry giant, claiming the insurer had misled them into believing that their preferred doctors and hospitals would be covered under the plans they purchased.

Contact the writer: 714-796-2440 or [email protected]

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