Two leading health insurers drew new fire from Wall Street for overstating their
Last week, California regulators found that Anthem Blue Cross, a unit of publicly traded WellPoint Inc., and nonprofit insurer Blue Shield of California violated state law by giving consumers misleading information about their provider networks.
The two companies' error rates each topped 25%, according to the California Department of Managed Health Care.
Anthem and Blue Shield contested the state's findings and said the agency's phone survey of physician offices was deeply flawed.
Citigroup healthcare analyst Carl McDonald agreed that not all of the problems were caused by the insurers. However, he said the health plans might be better served by spending less effort fighting the charges and instead working harder to improve patients' experience.
"It's extremely difficult for the plans to argue that there weren't major issues with provider directories for exchange products this year," McDonald said a research note.
"This seems like one of those situations where the plans could improve their credibility by owning up to the fact that there were a lot of issues this year and that it was extremely difficult to understand what providers were actually in-network," McDonald said.
The companies said the state exaggerated the problem and that many of the doctors who refused to accept Obamacare coverage during the survey were actually under contract as in-network providers.
The health plans said the accuracy of their networks has improved since the summer survey, and that consumers should have more reliable information during the current open enrollment in the state exchange, Covered California.
McDonald said "if plans are truly committed to becoming customer focused like they say they are, these are the kind of issues they will need to figure out."
Open enrollment for individual health policies runs through Feb. 15.
Regulators said they plan to conduct another audit in six months. Blue Shield and Anthem also face numerous consumer lawsuits over the network inaccuracies.
WellPoint and other health insurers have enjoyed a strong run on Wall Street, thanks to new business under Obamacare.
Shares of WellPoint have rallied 37% since the start of the year. The stock was up 62 cents to $126.51 in midday trading Monday on Wall Street.