Victoria Colliver, Chronicle Staff Writer
Tuesday, February 23, 2010
State investigators accused Anthem Blue Cross on Monday of committing more than 700 violations of California law, including misleading consumers, failing to pay claims on time and ignoring inquiries from regulators in the state insurance commissioner’s office.
Insurance Commissioner Steve Poizner had some harsh words for the health insurer, accusing the company, a subsidiary of WellPoint Inc., of being “belligerent” in its failure to cooperate with the Department of Insurance and “low-balling” customers in settlement discussions.
Anthem Blue Cross has come under state and national scrutiny in recent weeks for trying to impose rate increases as high as 39 percent on some of its 700,000 customers who buy individual coverage. Those increases, which are on hold until May 1, are not directly related to the alleged violations.
Judge to weigh validity
Poizner said Monday’s action was the result of a yearlong investigation into the company’s claims-paying practices between 2006 and 2009. An administrative law judge will determine whether the accusations are legitimate, a decision that could lead to fines of more than $7 million or up to $10,000 per violation.
“All insurance companies stumble into making mistakes,” Poizner said in a press conference. “It’s only when a health insurance company doesn’t take corrective action or is belligerent or not cooperative with us that we take this kind of action.”
Anthem Blue Cross officials said Tuesday that the Woodland Hills (Los Angeles County) company takes the allegations “very seriously” and recognizes its responsibility to pay claims “fairly, fully and promptly.”
“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,” Kristin Binns, spokeswoman for the insurer, said in a prepared statement.
Binns said the company had not yet received the complaint. “We look forward to receiving the specifics from the investigation and to working with Commissioner Poizner and his staff to resolve these issues to his satisfaction and in the best interest of our members,” she said.
Breakdown of complaints
The 732 alleged violations are 277 failures to pay claims within the required 30 days, 143 failures to respond to regulators investigating complaints within a “reasonable” time, 66 instances of misrepresenting facts to members, 25 failures to pay interest, 22 unreasonably low settlement offers, 21 failures to pay or contest a claim in 30 days, and 178 miscellaneous delays and other claims-handling violations.
Monday’s action comes a day before a hearing at the state Capitol about Anthem’s proposed rate increases. Leslie Margolin, president of Anthem, is scheduled to speak at the hearing before the Assembly Health Committee. WellPoint’s chief executive officer, Angela Braly, is set to appear before a federal congressional subcommittee Wednesday.
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