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Anthem Blue Cross parent accused of misrepresenting cancellation practices

Los Angeles city attorney's office says WellPoint misled the public earlier this year when it denied reports that it targeted women with breast cancer for cancellation of health insurance.

October 14, 2010|By Duke Helfand, Los Angeles Times

Los Angeles city prosecutors Wednesday accused the parent company of insurance giant Anthem Blue Cross of California of falsely stating that it had changed its procedures for canceling the policies of patients after they become sick.

The Los Angeles city attorney's office said that WellPoint Inc. misled the public earlier this year when it denied reports that it targeted women with breast cancer for cancellation.

The prosecutors' action is the latest chapter in the city attorney's ongoing case against WellPoint. It first sued the insurer in 2008, alleging false advertising and fraud over its practice of policy cancellations.

In an amended civil complaint filed Wednesday in Los Angeles County Superior Court, prosecutors said WellPoint issued three "false and misleading" press releases in April and May to burnish its corporate image as it fended off assertions about its cancellation practices in a news story and criticism from the Obama administration that followed.

The prosecutor's office contended that WellPoint continued to target women with breast cancer. It said the company also falsely stated that it had changed its procedures this year before the new federal healthcare law took effect. The law bars rescissions nationwide except in cases in which policyholders lie on applications.

Prosecutors acknowledged that WellPoint's rescissions in California had slowed to a "trickle" but said the Indianapolis company continued to misrepresent itself.

"This is a company that seems willing to say anything — true or not — in order to maintain their profit level," said Chief Asst. City Atty. Jeffrey Isaacs.

The most recent criticism began when news service Reuters reported in April that WellPoint targeted women with breast cancer for cancellation. The Obama administration used the report to further criticize WellPoint, which assailed the story, calling it inaccurate and wrong.

"We do not single out breast cancer or pregnancy," the company said at the time.

On Wednesday, WellPoint denied any wrongdoing.

"We stand by the statements we made regarding these issues," the company said. "The city attorney's allegations are misguided, and the company will vigorously defend the new claims along with the remainder of the 2-year-old complaint."

WellPoint and its California subsidiary have faced other criticism over the canceling of policies of sick people who ring up big medical bills.

In 2008, Anthem Blue Cross agreed to pay a $10-million fine to the California Department of Managed Health Care and to offer new coverage to 1,770 former policyholders to resolve an investigation by the agency.

duke.helfand@latimes.com

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