Amid growing scrutiny statewide, insurance giant Anthem Blue Cross faces another consumer lawsuit over its use of narrow networks in Obamacare coverage.
A group of Anthem policyholders sued California's largest for-profit health insurer Tuesday in state court, accusing the company of misrepresenting the size of its physician networks and the insurance benefits provided.
A similar suit seeking class-action status was filed June 20 against Anthem, a unit of WellPoint Inc., The Times has reported.
Samantha Cowart of Fallbrook sued Anthem in Los Angeles County Superior Court last month, accusing the company of misleading customers. Like nearly 1 million Californians, Cowart had a policy that was canceled last fall because it didn't comply with requirements of the Affordable Care Act.
To ease her transition, Anthem enrolled her in an exclusive provider organization plan that limited her access to out-of-network care even more than the PPO plan she had for 16 years. But Anthem sent her an insurance card in February labeling her coverage as a PPO.
As a result, Cowart said, she incurred several thousand dollars in medical bills that Anthem wouldn't cover.
“I didn’t have the regular PPO I thought I had,” Cowart said. “It was a bait and switch.”
In response to the two lawsuits, Anthem said "materials at the time of enrollment and in members' explanation of benefits have clearly stated that the plan was an EPO plan which may not have out of network benefits."
The company added that Blue Cross Blue Shield Assn. rules required the PPO designation on EPO member cards because coverage for emergencies is available in other states. Anthem said it later received a waiver from the rule and it issued new ID cards to clear up any confusion.
Separately, California regulators are investigating whether Anthem and Blue Shield of California violated state law in connection with inaccurate provider lists and making it difficult for patients to obtain timely care.
To hold down premiums under the health law, Anthem and Blue Shield cut the number of doctors and hospitals available to patients in the state's new health insurance market.
Both companies have acknowledged that mistakes have been made with respect to their networks and some confusion was inevitable during such a massive overhaul. The two insurers say they have contacted doctors repeatedly to confirm their network status, and they have both added more providers since January.
In a speech last month in Los Angeles, Anthem Blue Cross President Mark Morgan said the level of consumer complaints remains fairly low considering the overall enrollment under the Affordable Care Act.
Anthem led the state with about 425,000 people enrolled through Covered California, the state's health insurance exchange.
“Mind you even one complaint is one too many," Morgan said in his speech last month. "I’m not comfortable with anything above zero. But in the grand scheme of things with all the changes that have occurred we feel good.”
Similar allegations have been lodged against rival Blue Shield of California as well.
In May, two San Francisco residents sued Blue Shield in state court, accusing the company of misrepresenting that their policies would cover the full network.
A Blue Shield spokesman declined to comment on that case but said, "We believe enrollees should be as informed as possible about the products they select."
These exclusive-provider organization, or EPO, health plans have been particularly troublesome for some consumers who were accustomed to having more conventional preferred-provider organization, or PPO, policies.
One of the major differences is that patients with an EPO plan typically have little or no coverage if they see an out-of-network medical provider and they are often responsible for the full charges.
A PPO plan is typically more generous and provides some coverage for out-of-network care.
Many Californians say those differences in cost sharing weren't disclosed fully and that ongoing problems with the accuracy of insurance company provider lists have made it difficult to determine whether a doctor or medical practice is part of a network.
As a result, some policyholders have incurred large, unforeseen medical bills that they thought would be covered under their new health insurance.
Peter Lee, executive director of the Covered California exchange, has said the state agency is taking a hard look at EPO plans as part of its negotiations with insurers for 2015 rates and coverage.
In particular, exchange officials say they want to avoid consumers being surprised after seeking treatment.
"EPOs will continue to play a role," said exchange spokeswoman Anne Gonzales. "But we're going to have to do a better job educating people about how these networks work. We recognize the EPO model can be confusing."
Covered California is expected to announce details about next year's health plans, networks and rates later this month.
Some supporters of the Affordable Care Act say the smaller size of the provider networks isn't the problem so much as clear information about what doctors and hospitals are available.
“The problem has been the transparency and reliability of the networks," said Micah Weinberg, a health-policy analyst at the Bay Area Council, an employer-backed group.
"That's the problem that we need to fix. If we focus on narrowness we will be focusing on the wrong thing," Weinberg added.