At least twenty-three lawsuits have been filed in California alleging that WellPoint and its subsidiaries Blue Cross and Blue Shield illegally dumped patients with pre-approved claims, leaving them financially devastated.
The insurance giants are accused of creating a "retroaction review department" whose sole duty is to scour over existing claims, looking for grounds to terminate policies for patients who have already been given approval to seek medical treatments.
Basically, the insurance company is accused of going over pre-approved claims with a fine-tooth comb and if they find any inconsistencies, they will cancel the claim. An inconsistency is not fraud. It appears that WellPoint is merely looking for loopholes.
According to the Los Angeles Times, last year a Blue Cross employee admitted that the company canceled policies even though errors could have been made accidentally.
"We just look at whether the condition was disclosed on the application," not whether the omission was willful, testified employee Cynthia Rosenfeld. California state law allows policy cancellations only if patients made such omissions deliberately.
Patients who are enrolled in policies and have paid premiums are being told that their coverage has been canceled because of discrepancies found on their enrollment forms.
Another Blue Cross employee admitted that specific illnesses like diabetes and cardiovascular disease - the most costly illnesses to treat - triggered reviews by a four-member team that reviewed as many as 1,500 policies a week.
"When a claim comes in, there is a certain diagnosis that would pretty much (consign) them to be reviewed for a possible pre-existing condition. There is a list," employee Sheila Millan testified.
And while WellPoint boasts a 20% increase in profits for the first quarter of 2006, Blue Cross patients like Michael Norris are left out to dry. Norris said he was pre-approved last year for a throat surgery for his 4-year-old son, Kyle, but about six months later Blue Cross retroactively canceled his son's coverage and left the family with $15,000 in medical bills. Norris has launched a suit against the insurance company.
WellPoint has attracted the attention of consumer watchdogs The Foundation for Taxpayer and Consumer Rights (FTCR) who has condemned the insurance companies - accusing WellPoint of "getting fat by breaking its promises to patients" and adding that "illegal retro-active cancellations make a mockery of health insurance."
Patients were told they had coverage, they paid premiums on that coverage and they sought medical assistance. If a mistake was made on their enrollment forms or if they are unfortunate enough to be afflicted with a disease that the insurance companies deem expensive - WellPoint will not pay their medical bills. So, not only are patients dealing with the stress of illness and treatment - they must also face possible financial devastation.
Don't let this happen to you. If you are filling out a claim, make sure you've dotted your "I"s and crossed your "T"s or you may find yourself in financial ruin. If you've already filled out a claim and are concerned or your claim has been retroactively cancelled seek legal counsel immediately.