Providers, patients and consumer advocates aired complaints and praise about Blue Cross of California at a hearing held in Los Angeles by state regulators.
The Department of Managed Health Care called the hearing in response to more than 1,600 complaints it has received since the 2004 acquisition of Blue Cross parent WellPoint by Anthem for $16.4 billion.
About 1,200 of the complaints, now under investigation, are from physicians and hospitals about low payments and contract disputes. Another 300 are about premium increases, according to the department.
The hearing also examined a $950 million dividend passed from Blue Cross to Indianapolis-based WellPoint earlier this year. WellPoint secured Californias approval of the merger by agreeing to certain conditions, including not financing the purchase with California policyholder premiums. The department has raised concerns that the payment violates that agreement.
Brian Sassi, president of Blue Cross of California, said in a 30-minute presentation that the 2007 dividend size reflects smaller dividends mandated in the prior three years under the merger agreement and is comparable with competitors dividends.
Fee-schedule changes starting Aug. 30 are causing a mass exodus of physicians from the Blue Cross network, said David Aizuss, president of the Los Angeles County Medical Association.
The owners of 306-bed Alvarado Hospital in San Diego, however, praised Blue Cross for being responsive and reasonable.
Blue Cross is the states largest insurer, with 8.3 million members. The hearing wont result in immediate action, but could lead to fines and other penalties. In March, the department fined Blue Cross $1 million for routinely rescinding health insurance policies. -- by Rebecca Vesely