Anthem Blue Cross of California allegedly violated state consumer protection laws more than 700 times between 2006 and 2009, according to the California Insurance Department.
Failure to pay claims within 30 days; failure to pay interest on unreimbursed claims; misrepresenting facts or policy provisions to customers; unreasonably low settlement offers; and other delays and claims handling violations are among the accusations brought by the state.
In addition, the Woodland Hills, Calif.-based insurer allegedly failed on 143 occasions to respond to the state agency in a reasonable time so these issues could be investigated.
The maximum penalty for each violation is $10,000. The state's complaint will be heard before an administrative judge.
“It's just really critical health insurance companies pay claims on time and fully,” California Insurance Commissioner Steve Poizner said at a news conference. “There's lots of examples where these deadlines came and went.”
Anthem Blue Cross, a subsidiary of Indianapolis-based WellPoint, is under state and federal scrutiny for raising rates on individual consumers this spring by up to 39%. Those premium increases are on hold until May pending an independent actuarial review.
The claims investigation has been under way for more than one year, and was launched based on consumer complaints, Poizner said. A similar state investigation of UnitedHealth Group's PacifiCare, is ongoing.
WellPoint reported that it paid claims, on average, in 42.3 days as of the end of 2009, according to company financial statements. California insurance code requires insurers to pay claims within 30 days.
WellPoint said that it takes the issues raised by Poizner very seriously. “As the largest insurer in California, our responsibility is to pay the many millions of claims on behalf of our members each year fairly, fully and promptly," said Kristin Binns, a WellPoint spokeswoman, in an e-mail. “While this review represents a small fraction of those claims, it is nonetheless very important to us to make sure we take any corrective action that may be necessary."
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