Anthem Blue Cross broke law more than 700 times, official says


California’s largest for-profit health insurer violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, the state’s insurance commissioner said Monday.

Anthem Blue Cross of Woodland Hills could face fines of up to $7 million stemming from the alleged violations from 2006 to 2009. Commissioner Steve Poizner said the insurer repeatedly failed to respond to state regulators in a “reasonable time” as they investigated complaints over the last year.

“We believe there is evidence to suggest there are serious issues with how Anthem Blue Cross pays claims,” Poizner said at a Sacramento news conference. “Most disturbing to us is that they don’t even respond” to the Department of Insurance “in a timely way.”


Anthem’s parent company, WellPoint Inc., said it hadn’t seen the enforcement action but would cooperate fully with Poizner to resolve the matter “in the best interests” of its policyholders.

“We take the issues raised by Commissioner Poizner very seriously,” the Indianapolis company said in a statement. “As the largest insurer in California, our responsibility is to pay the many millions of claims on behalf of our members each year fairly, fully and promptly.

“While this review represents a small fraction of those claims, it is nonetheless very important to us to make sure we take any corrective action that may be necessary.”

WellPoint and Anthem have faced intense criticism from consumers, regulators, members of Congress and the Obama administration over rate hike proposals of as much as 39% for customers with individual policies in California.

Lawmakers in Sacramento and Washington are holding hearings this week on the increases, which have been postponed until May 1 amid the outcry.

The rate hikes would affect many of the 800,000 individual policyholders in California.

Anthem is not the only company facing scrutiny over the way it pays claims.

Poizner’s office filed a similar complaint against Cypress-based PacifiCare in January 2008.


Officials said at the time that they had uncovered 133,000 violations of state laws and regulations over payments for medical care. That case is pending, Poizner said Monday.

Nearly 40% of the violations in the Anthem case, 277, stem from allegations that the company failed to pay patient claims within 30 days as required by state law, officials said.

Poizner’s office filed the enforcement action against Anthem on Monday with the Office of Administrative Hearings.

An administrative law judge will hear the matter. Each violation carries a maximum penalty of $10,000.

“Over the next several months, we hope to bring this case to fruition,” Poizner said.