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Health insurer cited in policy violations

Managed Care Weekly Advisor, July 4, 2007

A Blue Cross company is under fire from the Department of Insurance after a random sampling found more than half of the health insurance policy cancellations were erroneously handled.

In 2004, BC Life & Health of California revoked 1,880 individual health insurance policies. The state Department of Insurance studied 83 sample cases and issued 49 citations, alleging 67 violations of fair-claims handling laws. When coverage is revoked, it as if the policy never existed, and the policyholder and healthcare providers are left to handle outstanding charges.

BC Health could face fines as high as $10,000 per sustained infraction, as well as further examinations by the state. The Department of Insurance is the second healthcare regulator to target WellPoint, the largest insurer in the state and parent company of BC Life & Health.

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