State Regulators Fine Blue Cross for Canceling Policies
West News • March 26, 2007
State regulators fined California's largest health insurance provider $1 million for violating state law, saying an investigation found that the company systematically dropped policyholders after ...
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Subject: IMPROPER rescission--an example
Posted On: March 29, 2007, 11:41 am CDT
Posted By: Klapper
Comment:
A woman leaves her group insurance and buys individual coverage when she moves to California. Three months later, she
visits a new OB-GYN as she has just moved to L.A from Des Moines. She is asked to complete health history questionnaire at Dr's office prior to seeing physician. She discloses that she has had two children, has had normal pap smears for many years, had bladder surgery two years ago in Iowa, has had a reaction to a chemical at work that caused skin rash that was treated successfully one year ago. She also mentions Dr visit for chest pain 2 years ago.
This new Dr examines her, and his findings include a suspicious pap smear .
Further expensive tests are ordered,and hysterectomy is contemplated. As an inpatient, another physician collects data on her health history, and the resulting data is much more detailed. She spends 30 minutes describing her health history to the in-take physician, while it took her 4 minutes to jot down the high points on her first visit to the new OB-GYN.
When the company investigates, they discover on the hospital record that she had been treated by a dermatologist for a skin condition . Also, bladder infections have been treated in past and she had chiropractic treatment six years ago for a back strain. Also, an evaluation by cardiologist .
At this point the Blue Cross examiner concludes:
1)She failed to disclose the chiropractic treatment
2)She failed to disclosed bladder infections
3)She failed to mention the dermatologist
4)She failed to mention the cardiologist
Blue Cross rescinds the coverage. They avoid paying for the very expensive testing for investigating of abnormal pap, and avoid the hysterectomy charges that will be filed.
This is an improper rescission.
1) Chiro tx a long time ago is of no consequence per their underwriting regulations
2) Bladder infections are associated with bladder surgery--this condition was indeed disclosed .
3) skin rash was disclosed. The fact that she did not spell out DERMATOLOGIST is not evidence of misrepresentation.
4)chest pain ER visit was disclosed--follow-up visit to cardiologist is implied.
This case did not go to trial. It was settled for $700,000, and she was able to have her coverage reinstated.
This example of sloppy and incomplete analysis on the part of Blue Cross demonstrates why they are in trouble in 2007. They just do not get it...
West News 
Subject: IMPROPER rescission--an example
visits a new OB-GYN as she has just moved to L.A from Des Moines. She is asked to complete health history questionnaire at Dr's office prior to seeing physician. She discloses that she has had two children, has had normal pap smears for many years, had bladder surgery two years ago in Iowa, has had a reaction to a chemical at work that caused skin rash that was treated successfully one year ago. She also mentions Dr visit for chest pain 2 years ago.
This new Dr examines her, and his findings include a suspicious pap smear .
Further expensive tests are ordered,and hysterectomy is contemplated. As an inpatient, another physician collects data on her health history, and the resulting data is much more detailed. She spends 30 minutes describing her health history to the in-take physician, while it took her 4 minutes to jot down the high points on her first visit to the new OB-GYN.
When the company investigates, they discover on the hospital record that she had been treated by a dermatologist for a skin condition . Also, bladder infections have been treated in past and she had chiropractic treatment six years ago for a back strain. Also, an evaluation by cardiologist .
At this point the Blue Cross examiner concludes:
1)She failed to disclose the chiropractic treatment
2)She failed to disclosed bladder infections
3)She failed to mention the dermatologist
4)She failed to mention the cardiologist
Blue Cross rescinds the coverage. They avoid paying for the very expensive testing for investigating of abnormal pap, and avoid the hysterectomy charges that will be filed.
This is an improper rescission.
1) Chiro tx a long time ago is of no consequence per their underwriting regulations
2) Bladder infections are associated with bladder surgery--this condition was indeed disclosed .
3) skin rash was disclosed. The fact that she did not spell out DERMATOLOGIST is not evidence of misrepresentation.
4)chest pain ER visit was disclosed--follow-up visit to cardiologist is implied.
This case did not go to trial. It was settled for $700,000, and she was able to have her coverage reinstated.
This example of sloppy and incomplete analysis on the part of Blue Cross demonstrates why they are in trouble in 2007. They just do not get it...