Legal News

L.A. city attorney sues state's biggest healthcare insurer for over $1 billion

By Jason Siegel

Los Angeles City Attorney is seeking over $1 billion in fines and restitution from California's largest healthcare insurer, the Associated Press reported.

The suit against WellPoint, Inc and two of its subsidiaries, Anthem Blue Cross of California and Anthem Blue Cross Life, was filed yesterday.

It alleges Blue Cross used false and misleading advertising to get over 500,000 customers and then intentionally gave them misleading forms, with little or no meaningful review of their responses or investigation of their medical histories. This stacked the deck against policy holders, Delgadillo said in a press release, claiming claiming Blue Cross retroactively investigated policy holders history and discrepancies in their application once claims for medical services were submitted.

The civil suit seeks civil penalties of $2,500 for each violation of the Unfair Competition Law and False Advertising Law and $5,000 if the victim is elderly or disabled person. The suit also seeks to reinstate wrongfully canceled policies and pay bull restitution. The total fines could exceed $1 billion.

?The health insurance industry in not focused on improving our care, lowering our costs, or rooting out fraud," Delgadillo said in a press release. "It?s singular focus is on maximizing profits ? at the expense of patients and their doctors.?

Delgadillo sued Health Net in February, claiming similar crimes.

The state Department of Managed Health Care fined Health Net and Blue Cross and is reviewing the practices of other major insurers, the San Francisco Chronicle reported.

Full post as published by Legal Pad | LA on April 17, 2008 (boomark / email).