Blue Cross of California has announced it is changing their underwriting philosophy with regard to retrospective review and rescission. We are almost certain the turning point came when InsureBlog brought pressure to bear on the carrier by shining a bright light in the midst of underwriting darkness.
Blue Cross of California (Blue Cross) today outlined a series of steps it will implement to revise its process for rescinding health insurance in cases where the policy holder misrepresented his or her true health status when applying for insurance.
Key components of this initiative include 1) development of new insurance application wording; 2) new written rescission policies and procedures; 3) creation of a Rescission Review Committee that includes at least one medical doctor; and 4) creation of a dedicated ombudsman to communicate with customers on rescission issues.
Let's look at this piece by piece.
New Health Statement for Application Form
The new application is designed to simplify the medical questions, provide additional clarity to the questions and shorten many time periods covered by the questions.
Simplify is code for asking broader questions. With regard to illness, the question can be phrased "Have you ever been sick? If so, tell us about it."
As for shortened time frames, the question may be "At any time between 1916 and the present, have you ever seen a doctor? If so, why?"
Revised Policies & Procedures for the Underwriting and Retrospective
These revised policies memorialize and clarify the initial underwriting process which will help explain certain underwriting practices. The policies also clearly document certain practices such as when follow-up investigation is or is not necessary and the process for reviewing an applicant's prior claims history if the applicant previously was a BCC member.
"memorialize and clarify". This has a lawyer's fingerprints all over it.
"clearly document certain practices such as when follow-up investigation is or is not necessary". Translation, don't you dare file a claim.
New Committee Structure for the Rescission Review Process
In all cases where the reviewing underwriter recommends rescission, the final decision whether to rescind will be made by a newly formed committee which will include a Medical Director
No more flipping a coin, tossing darts, or asking Susie the janitor to decide. Now it is you vs. the committee.
Dedicated Ombudsman for Rescission Issues
Blue Cross will have a dedicated ombudsman for members undergoing retrospective review or who have been rescinded.
Meet our new Obmudsman.
Revised Procedures for Review of Rescissions
Blue Cross will clarify and further document its procedures for review of rescissions upon request of a rescinded member
We will make it clear, very clear, why you should accept our offer to rescind coverage.
Revised Documentation for Retrospective Review Decisions
This revised documentation creates better documentation and explanation of rescission decisions.
Please feel free to ask any questions about our policy.
Focused Training in Underwriting Department
Blue Cross will develop enhanced training programs in both the upfront underwriting and the retrospective review process.
Our new underwriter training class.
Increased Audits of Underwriting and Retrospective Review
Blue Cross will enhance the internal audit frequency of the upfront underwriting process, the retrospective review process, and the documentation of retrospective reviews. These increased audits will also serve the goal of accuracy and consistency in the decision-making proces
More audits are better for everyone. Don't you agree?
See how much better life will be now?