UnitedHealth Files Lawsuit against California Insurance Commissioner

Los Angeles, CAUsually insurance companies are the defendants in insurance lawsuits that involve allegations of mishandled claims, but UnitedHealth has filed a California insurance lawsuit against the California insurance commissioner. The lawsuit alleges California Insurance Commissioner Dave Jones is abusing his power and has sought punishment against the insurer for minor violations.

According to Insurance Journal (7/14/14), Jones investigated UnitedHealth after the company took over PacifiCare in 2005. Due to issues with UnitedHealth’s purchase of PacifiCare, there were a reported 900,000 violations, including mistakes made while processing medical claims. California had previously asked for a $10 billion penalty against UnitedHealth, but a judge found that the insurer should pay fines of up to $11.5 million.

Jones has since rejected the judge’s decision and ordered UnitedHealth to pay $173.6 million by July 22.

UnitedHealth filed the appeal arguing that the fine sets a dangerous precedent.

Meanwhile, a lawsuit has been filed in California against Anthem Blue Cross, alleging the company breached its contract with policyholders. According to court documents, the plaintiff, Samantha Berryessa Cowart, alleges Anthem Blue Cross changed her policy without telling her that her coverage had changed.

Cowart alleges that she believed she was enrolled in Anthem’s Preferred Provider Organization when she was actually in the Exclusive Provider Organization. Despite having a membership card with the letters PPO, for Preferred Provider Organization, Cowart was not actually a PPO member. The difference between the two organizations is that the Preferred Provider plan has member access to out-of-network providers. Exclusive Provider members can only access limited providers. They also have no coverage if they use a provider who is out of network.

Thinking she was in the Preferred Provider Organization, Cowart went to an out-of-network provider and was told her treatment would be covered. It was only when her claim was not approved because she went to an out-of-network provider that she learned about the change in coverage. Cowart also alleges that when she tried to find doctors within her network, Anthem failed to provide accurate information, preventing her from getting treatment in a timely manner.

The lawsuit (case number BC 5490438, filed in Superior Court for the State of California, County of Los Angeles) seeks class-action status for all California residents who have an Anthem Exclusive Provider Plan but received a Preferred Provider Plan Card. According to the lawsuit, policyholders in a situation similar to Cowart’s may have had treatment thinking it was covered only to have their claim denied and be forced to pay for treatment out of pocket or avoid treatment entirely.