Anthem Blue Cross of California has settled a lawsuit brought by the California Hospital Association for $11.8 million over its revoking of members insurance policies after they received hospital care.
The hospital association filed the class action lawsuit in October 2006, and it involves health insurance policy rescissions dating back to 2001. Under the terms of the settlement agreement, Anthem Blue Cross of California, a subsidiary of WellPoint, will set up an $11.65 million facility compensation fund to reimburse hospitals for services they provided to patients whose individual policies were revoked retroactively by the insurer. Another $150,000 will reimburse patients who paid hospitals directly for services. Affected members will be freed of all outstanding claims owed to hospitals.
We have reached an understanding with California hospitals on behalf of individuals under which the hospitals will no longer pursue reimbursement from individuals whose policies were previously rescinded, Leslie Margolin, president of Anthem Blue Cross of California, said in a written statement.
The California Department of Managed Health Care, which oversees HMOs, fined Anthem Blue Cross of California $1 million in 2007 for policy rescissions but has not yet collected on the fine. The agency has reached agreements with other major insurers over rescissions, and agreements include reinstating members.
Margolin said Anthem Blue Cross of California is actively engaged in discussions with the agency to bring closure to all issues related to previous rescissions.
-- by Rebecca Vesely
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