The Department of Insurance has accused Blue Shield of illegally rescinding coverage for more than 200 Californians, according to a Los Angeles Times today. Insurance Commissioner Steve Poizner is seeking a $12.6 million fine.
The other insurance regulator — Department of Managed Health Care — is still reviewing Blue Shield’s cancellation practices. If violations are found, DMHC could impose additional fines on the company.
This is the third health insurer in the past year found to have improperly rescinded policies of their enrollees. The practice involves insurers retroactively cancelling policies on patients, who seek treatment for illnesses believing they are covered. After their policies are cancelled, patients and providers are on the hook for hundreds of thousands in unpaid medical expenses.
Blue Cross and Health Net were other insurers, either fined by the state, pursued in lawsuits, or both. Court documents showed Health Net was able to avoid nearly $36 million in medical expenses, and gave bonuses to those who helped the company avoid paying to treat patients’ illnesses.
I wouldn’t be surprised if more big insurers were nailed to the wall for this practice in the coming months, year.