Methodist Hospital of Southern California, Arcadia, today is filing a lawsuit in Los Angeles Superior Court alleging that Blue Shield of California, San Francisco, routinely authorized costly medical procedures then refused to pay for them after retroactively canceling the patients' insurance policies, according to the hospital's attorney. The lawsuit comes just days after a nearly identical lawsuit was filed against Blue Cross of California, Woodland Hills, by five-hospital MemorialCare Medical Centers, Huntington Beach, Calif. The suits come amid mounting allegations that the insurers illegally scour members' original applications after they submit large claims, looking for inadvertent misstatements and omissions to use as a pretext to rescind their coverage and escape hefty costs. State insurance regulators are investigating the charges made in a series of individual lawsuits filed in March and April by 20 former Blue Cross members and three former Blue Shield members. The latest lawsuit claims that Blue Shield's "post-claims underwriting" tactics have hurt Methodist financially by requiring the 346-bed, not-for-profit hospital to write off medical bills that patients retroactively dropped by the insurer were unable to pay. The hospital is seeking unspecified damages. Daron Tooch, an attorney with the Los Angeles-based law firm Hooper, Lundy & Bookman, which represents both Methodist and MemorialCare, said he expects to file more lawsuits on behalf of other hospitals soon. -- by Laura B. Benko
Second lawsuit targets Blues 'post-claims underwriting'
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