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Anthem Blue Cross: First Rate Hikes, Now Charges

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By Tanya Roth, Esq. on February 23, 2010 11:59 AM

As discussed in a prior post, California's biggest for-profit health insurer, Anthem Blue Cross, recently proposed a major rate hike of up to 39% which would affect its individual policy holders in California. This announcement drew the attention of Health and Human Services Secretary Kathleen Sebelius as well as California Insurance Commissioner Steve Poizner. Today, the Los Angeles Times reports that Poizner's office is alleging over 700 violations of California law by Anthem Blue Cross over the last several years. Anthem's parent company is Well Point, Inc., and is based in Indianapolis.

According to the Times, Poizner asserts that the Woodland Hills company has repeatedly failed to pay claims on time and has misrepresented policy benefits to consumers. The company won't even respond to inquiries from the Department of Insurance in a timely manner, said Poizner. Poizner's office says that nearly 40% of the violations in the Anthem case stem from allegations that the company failed to pay patient claims within 30 days as required by state law, officials said.

The Commissioner filed the enforcement action against Anthem yesterday, with the California Office of Administrative Hearings. Each violation carries a maximum penalty of $10,000.

The Times reports Well Point is taking the allegations seriously. "While this review represents a small fraction of [our] claims, it is nonetheless very important to us to make sure we take any corrective action that may be necessary," said the company in a statement.

A similar case was filed against insurer PacifiCare in January, 2008, involving an alleged 133,000 violations of state laws and regulations over payments for medical care. That case is on-going.

Anthem's proposed rate hike, which could affect up to 800,000 customers in California, has prompted hearings in both Sacramento and Washington, D.C. The increase has been postponed until May 1.

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