Huffpost Los Angeles

Anthem Blue Cross: State Regulator Finds More Than 700 Violations

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SACRAMENTO, Calif.

Kristin Binns, a spokeswoman for the insurer, said the company takes the allegations seriously, though she noted they represent a fraction of the company's millions of claims.

The Los Angeles-based company, a subsidiary of Indianapolis-based WellPoint Inc., has been criticized recently by Poizner, state and federal lawmakers, and Obama administration officials for proposing rate hikes as high as 39 percent. The company put those increases on hold until May 1.

Poizner said he was filing official accusations with the state's Office of Administrative Hearing alleging the policy handling violations. That will trigger hearings on whether the insurer should be fined.

"Complaints just keep coming in and increasing over time. When it gets into the hundreds, it gets my attention," Poizner said at a state Capitol news conference. "It's only when a health care company doesn't take corrective action or is belligerent or uncooperative with us that we take this type of action, and that's the case with Anthem Blue Cross."

The 732 violations include allegations of 277 failures to pay claims in 30 days, 143 failures to respond quickly to regulators during complaint investigations, 66 instances of misrepresenting facts or insurance policies to consumers, 25 failures to pay interest on claims, 21 failures to pay or contest a claim within 30 days, 22 unreasonably low settlement offers, and 178 other miscellaneous delays and claims violations.

"As the largest insurer in California, our responsibility is to pay the many millions of claims on behalf of our members each year fairly, fully and promptly," company spokeswoman Binns said in a written statement. "While this review represents a small fraction of those claims, it is nonetheless very important to us to make sure we take any corrective action that may be necessary."

In February 2009, the company agreed to pay a $1 million fine and reinstate 2,330 people whose insurance was rescinded after they submitted bills for expensive care.

The company also agreed as part of last year's settlement with the California Department of Insurance to reimburse the dropped patients for medical costs they paid after their policies were terminated. The company said that would cost another $14 million.

Anthem's proposed rate increases will be the focus of an oversight hearing at the Capitol Tuesday. Anthem President Leslie Margolin is scheduled to appear before the Assembly Health Committee, along with several insurance regulators, health care experts and consumer advocates.

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Associated Press Writer Don Thompson contributed to this report.

(This version CORRECTS that Anthem's headquarters are in Los Angeles, Wellpoint's state headquarters are in Thousand Oaks.)

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