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Patrick DeBlase
Patrick DeBlase
Attorney •

Blue Cross' "Fixes" for Patient Dumping are Too Little, Too Late

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Blue Cross attempts to appease furor over allegations of policyholder dumping by making unspecified changes to its cancellation policies. Critics aren’t buying it.

On Tuesday, Blue Cross announced that it would change procedures for canceling individual health insurance policies. The health care colossus, however, failed to provide any specifics. California state regulators and class action lawsuits have come down on Blue Cross recently for its unabashed contract breaches and cancellations with policyholders. Regulators and plaintiffs allege that Blue Cross illegally dumped sick policyholders to avoid expensive claims.

They also allege Blue Cross unilaterally and unlawfully cancel or modify contracts during the term of the contract. Kiesel, Boucher & Larson, LLP has brought a class action lawsuit against Blue Cross for modifying year-long contracts in the middle fo the year. The case was certified as a class action and tried in a binding arbitration before Justice Richard Neal, Ret. who ruled that Blue Cross had breached the covenant of good faith and fair dealing in their health insurance contracts. Attorneys at Kiesel, Boucher & Larson, LLP obtained sworn testimony from Blue Cross management as to their policies and rational for contract changes.

As for Blue Cross’ current woes and attempts to correct, critics are not impressed.

“I’m underwhelmed,” said Bryan Liang, executive director of the Health Law Institute at California Western School of Law in San Diego. “The fundamental issue still is that they are not addressing these policies according to California law. Once they issue the policy, unless there is actual fraud, they cannot rescind. So despite whatever window dressing they put in place, they are still violating the law.”