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Blue Cross Faces More Legal Challenges

Audio

Aired 4/19/09

Blue Cross of California has been slapped with a lawsuit, alleging the company has illegally canceled members’ policies and left hospitals without proper payment. It’s the latest in a series of legal challenges against Blue Cross. KPBS Reporter Kenny Goldberg has more.

The suit says Blue Cross examines patients’ applications for discrepancies whenever a claim is filed over a certain dollar amount. The suit alleges the company then revokes a patient’s membership, leaving hospitals holding the bag. A Blue Cross spokesman says insurers are entitled to rescind a member’s policy if they’ve lied on their application.

Attorney Daron Tooch represents California hospitals in the lawsuit. 

Tooch: We’re not saying Blue Cross can’t do that. What we are saying is you need to do that before the hospitals provide the service, not afterwards.”

Last month state regulators fined Blue Cross $200,000 for illegally canceling a woman’s policy. Blue Cross currently faces a number of lawsuits over its cancellations.

Kenny Goldberg, KPBS News.

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