Blue News

Thirteen more lawsuits were filed Thursday in Los Angeles alleging that major health insurance companies illegally canceled policies for patients already approved for medical treatments.

According to the complaints, the insurers have created "retroaction review" departments whose sole purpose is to terminate policies for patients who had previously been given approval for medical treatments.

I will be interested in seeing how this plays out. I will also be surprised to see if this statement “departments whose sole purpose is to terminate policies for patients who had previously been given approval for medical treatments” holds up.


"We do not rescind coverage based on someone having a diagnosis or receiving services," he said. "We rescind based on misrepresentations in an application that we discover."

Misrepresentation on an application is just as much fraud as is misrepresentation by an agent selling coverage. Both are criminal acts.

After a patient files a claim, the insurance company re-examines the application to try to find any omissions or inconsistencies, he said.

Patients then get dumped for inconsistencies -- not fraud.

Isn’t an inconsistency in what is written on the application with what is reality a fraudulent act? Seems so to me.

Plaintiff Parvin Mottaghi of Glendale alleges she has $700,000 in bills after Blue Shield canceled her policy following an approved open-heart surgery by claiming the application was incomplete. She is now uninsured.

I am sure there is more to this story that has not been told. I could speculate, but that would make me no better than the reporter who authored this story and omitted pertinent facts.

Don't misread me. I do empathize with the individuals who have had their coverage cancelled, but I also am aware of the fraud that is committed against carriers with some regularity.