Blue Shield May Have to Cough Up $12.6 Million Penalty
December 15, 2007
Blue Shield is in line for paying a $12.6 million penalty if the states insurance commissioner has his way. This is due to improper claim processing and unfair cancellation of member’s medical coverage.
Blue Shield has committed 1,200 alleged law violations which has had the effect of 200+ people losing insurance coverage after submitting medical treatment claims. According to commissioner Steve Poisner, this has led to decreased trust in health care delivery.
Duncan Ross, president Blue Shield of California has said that this step is outrageous. They were also injust in his opinion and would be combated. Instances of rescinding policies by health insurers with the stated reason that proper health information was not given in the beginning is being seriously looked into.
The California Blue Cross has already been fined $1.2 million and Kaiser Permanente has been fined $325,000 for improperly cancelling policies by the state Department of Managed Health Care. The Action against Blue Shield is the first time action has been taken against a health insurance company by the Department of Insurance.
These moves are meant to send out strong signals against improper rescission by health insurers. This will help the general public in the long run.
