Physician and Hospital Groups Join Payment Lawsuit Against Blue Cross

The number of individuals and groups filing suit against Blue Cross is ever increasing.  Most recently, organizations representing California physicians and hospitals joined a lawsuit against the company.  Blue Cross is California’s largest health plan; California has accused it of illegally and routinely refusing to pay them millions of dollars for medical care provided to enrollees whose policies were later canceled.

Critics have long argued that health plans like Blue Cross cancel individuals’ policies after incurring costly treatments. Such cancellations have left some patients with significant financial or medical hardships.

Disgruntled former policyholders have filed hundreds of lawsuits against Blue Cross and other carriers in California, accusing them of digging up application flaws after the fact so they can shirk their promise to cover medical bills. They allege insurers are violating state law by failing to determine whether policyholders intended to lie on applications, or merely made mistakes.

The suit alleges that such unpaid bills are straining the state’s healthcare network. As the state’s largest healthcare insurer, Blue Cross does business with most hospitals and physicians. California hospitals reported shouldering $7.7 billion in bad debt last year.