OBAMACARE:: Blue Shield to pay $2 million over dropping of policyholders – LATimes
By MB Snow at December 29, 2011 | 12:03 am | Print
The settlement of a suit filed by L.A. ends a probe into more than 1,000 cases. The insurer was accused of dropping clients who got ill and needed expensive treatment. The city and county will split the money.
More than a year after the healthcare reform law sought to prevent sick patients from losing medical coverage, insurers are still paying for their alleged abuses.
Blue Shield has agreed to pay $2 million to resolve accusations that the company improperly dropped policyholders after they got sick and needed expensive treatment.
The settlement, announced Wednesday by Los Angeles City Atty. Carmen Trutanich, ends an investigation into more than 1,000 so-called rescissions by Blue Shield, a San Francisco-based not-for-profit company.
Blue Shield spokesman Steve Shivinsky said the firm settled to avoid litigation.
“Our process meets or exceeds all legal and regulatory requirements,” Shivinsky said in a statement. “In every instance, we provide immediate notice, ensure multiple layers of review, involve a medical director in the decision, give members an opportunity to provide additional information before we take any action, and follow the guidance of an independent third party review.”
Blue Shield is among a handful of California insurers that have paid millions to state and local regulators in response to investigations into the systematic dropping of policyholders with expensive medical needs.
Insurers defended the practice, known as rescission, saying it was necessary to guard against fraud. But a series of Times articles beginning in 2006, legislative hearings, lawsuits and regulatory investigations showed that insurers often rescinded coverage without regard for whether their customers intended to deceive them about preexisting conditions.
The practice resulted in some people losing coverage through no fault of their own, often over trivial bits of health history that had nothing to do with the claims that triggered the investigations.
via Blue Shield to pay $2 million over dropping of policyholders – latimes.com.