HEALTHCARE - Blue Cross undergoes exam - The health plan comes under fire during a state regulatory hearing. The company says members are well served.

Nearly three years later, state regulators say they have been besieged by complaints that patients are paying more and doctors are about to be paid less. Regulators held an unusual public hearing Tuesday in downtown Los Angeles to find out why.

Executives and supporters of Blue Cross were on hand to say the company is committed to California and that its policies represent a good deal for members.

Blue Cross said it only made sense that it would receive the most complaints because of its position as the state's No. 1 healthcare plan. The company said that on the whole its members were well served.

But the dominant message was just the opposite from a standing-room-only crowd of more than 200 patients, physicians and hospital operators at the daylong hearing.

"Something must be done now by the department," said Janet Stephens, a disabled nurse with a bladder condition who has watched her benefits decline while her Blue Cross premium has steadily risen in recent years to $569 a month.

Protesters carrying signs reading "Blue Cross makes us sick" picketed outside the hearing room before the meeting began. They said the health plan provided an example of why healthcare reform was needed.

"Blue Cross promised to be a good citizen," said Anthony Wright, executive director of HealthAccess California, a consumer group based in Sacramento. "But right now it's clear they need to be put on probation."

Cindy Ehnes, director of the state Department of Managed Health Care, called the hearing to help the agency evaluate how well Blue Cross has served Californians since it was purchased by Indianapolis-based WellPoint Inc. nearly three years ago. The department said it had received more than 4,100 calls and complaints regarding Blue Cross since the merger.

Ehnes said in an interview that the department would use the testimony to help decide whether the health plan lived up to the promises it made to win state approval for the November 2004 acquisition. She said a decision should be forthcoming within three months.

The department listed some of its concerns, including a $950-million dividend WellPoint took from Blue Cross of California this year. That was almost twice the amount it took in each of the previous two years, the department said.