Blue Cross: The Big Bad

We have an emerging villain in the health care debate and that is the behemoth Blue Cross. They are the only major insurer who is opposing Arnold's health care plan. Blue Cross is making bank on the current system and opposes any change that might hurt their huge profits. It isn't just their opposition to reform that puts then in the big bad category. How they conduct their business is reason enough.

Last week Californian physicians and hospitals joined a lawsuit against Blue Cross, accusing the company of failing to pay countless millions for medical care for their customers. See, they have this nice little habit of canceling people's policies when they get sick and not paying what they owe. This only happens for individual policy holders. Then the patients are stuck with the bill.

Blue Cross claims that they are only canceling policies of those who "submitted incomplete or inaccurate applications for coverage." First of all, if they submitted incomplete information then it is Blue Cross's responsibility to get that information before deciding to offer coverage. They are deliberately looking for excuses to drop these people off their rolls. It is not like we see the same thing happening for healthy people. It is just the sick, cutting into their profit margin, that they are looking to ax. It is an absolutely disgraceful policy and illegal to boot.

Let's be clear about what is going on. Individuals sign up for coverage and pay their monthly bills. Some time down the road they get sick and need surgery or other care. Their physicians request approval from Blue Cross for care, which is then granted. At some point later, Blue Cross cancels the policy and then refuses to pay for care they already authorized. This is what they have to say:

WellPoint spokeswoman Shannon Troughton said it was not that simple. Blue Cross contends that California law bars insurers from revoking authorizations for care, and Troughton said the company complied with that.

"Blue Cross' pre-authorization for healthcare services is an advance determination of the medical necessity of a proposed procedure only; it is not a guarantee of payment," she said, adding that the caveat is "stated expressly" when the pre-authorization request is made.

"Our authorizations for care, based on medical necessity, include express statements that they are not guarantees of payment," she said.

Blue Cross is trying to claim that an authorization does not mean they promise to pay for it. What good is Blue Cross saying that a procedure is medically necessary? That is for doctors to determine. It is up to Blue Cross to say whether or not they concur and are willing to pay.

California Medical Assn. President Anmol S. Mahal, a Fremont gastroenterologist, said Blue Cross' refusal to pay in such cases was unfair.

"We're talking about elective services that are provided by physicians in good faith after getting authorization," he said. "The physicians are not the ones who should be punished."

Nor should the individual policy holders who paid their money to have health insurance. Instead, they are facing medical bills that can be many times their income. It is impossible for them to pay, and given the new bankruptcy bill, even more difficult to file for that protection.

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. It is too early to know just how much of that is due to retroactive cancellations, hospital group spokeswoman Emerson said.

But, she said, "it's fair to say it's potentially millions and millions."

The doctor and hospital groups reiterated allegations of former policyholders that, in many cases, the rescissions were improper in the first place.

Our health care system is seriously broken and Blue Cross's policies are a big reason why.