Amid growing scrutiny statewide, insurance giant Anthem Blue Cross faces another consumer lawsuit over its use of narrow networks in
Six 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 in Los Angeles County Superior Court against Anthem, a unit of WellPoint Inc. And in May, two San Francisco residents sued Blue Shield of California, alleging it misled them into believing their policies would cover the full network.
The three lawsuits indicate that exclusive provider organization, or EPO, health plans sold under the Affordable Care Act have been particularly troublesome for some consumers who are accustomed to preferred provider organization, or PPO, policies.
In the latest case, for instance, one of the plaintiffs is a physician, Dr. Betsy Felser of Los Angeles, who alleged that she was fraudulently induced into buying a plan with a drastically reduced network of providers.
"I believed I had purchased a PPO plan, but only found out at my son's initial doctor's appointment that [Anthem] Blue Cross had sold me an EPO plan," she said in a statement. The lawsuit stated that Anthem never notified her that it didn't even offer a PPO plan in the area.
In the June 20 action, Samantha Cowart of Fallbrook accused Anthem of misleading customers by enrolling them in an EPO plan that limited access to out-of-network care even more than the PPO plan she and others previously had.
But Anthem sent Cowart an insurance card in February labeling her coverage as a PPO, resulting in several thousand dollars in medical bills that Anthem wouldn't cover, she said.
"I didn't have the regular PPO I thought I had," Cowart said.
Anthem, responding to the latest two lawsuits, said that "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 said Blue Cross Blue Shield Assn. rules require 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.
A Blue Shield spokesman declined to comment on the San Francisco case but said: "We believe enrollees should be as informed as possible about the products they select."
One of the major differences in the two provider networks is that patients with an EPO plan typically have little or no coverage if they see an out-of-network medical provider and often are responsible for the full charges. A PPO plan is typically more generous and provides some coverage for out-of-network care.
Many Californians said 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.
Separately, California regulators are investigating whether Anthem and Blue Shield of California violated state law in connection with inaccurate provider lists and increased obstacles to obtaining 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 mistakes and some confusion over their new networks. They said they have contacted doctors repeatedly to confirm their network status and have added more providers since January.
Peter Lee, executive director of the Covered California insurance 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 said they wanted to avoid post-treatment billing surprises to consumers.
Covered California is expected to announce details about next year's health plans, networks and rates this month.
Some supporters of the Affordable Care Act said 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."