The Los Angeles Times
October 18, 2006
Lisa Girion

BLUE CROSS SETTLING PATIENTS' LAWSUITS

The big insurer, accused of illegally canceling some policies, agrees to pay its ex-customers.

Facing the threat of punishment from regulators, Blue Cross of California has agreed to settle more than 70 lawsuits and claims filed by patients who accused the state's largest health insurer of illegally canceling their coverage after they got sick.

The settlements will allow the former policyholders to pay hefty medical bills that they were stuck with after losing their insurance.

Lawyers involved in the cases, who confirmed that they had been resolved, said the dollar amounts of the settlements were confidential.

In exchange for the money, the patients agreed to drop allegations that Blue Cross had terminated their coverage to avoid paying for treatment.

The accords could be part of an effort by Blue Cross to deflect public criticism, mollify regulators and avoid courtroom showdowns, although critics say the insurer still needs to reform its practices.

State regulators have fined Blue Cross in one case of canceled coverage, and more sanctions are expected.

Blue Cross, owned by Indianapolis-based WellPoint Inc., the nation's largest provider of health benefits, maintained that it was following the law. It declined to comment on the suits, saying talks to settle them were confidential.

William Shernoff, a Claremont lawyer representing many of the plaintiffs, said his clients wouldn't have to worry about medical bills ever again.

"Every one of our clients is pleased," he said. "But that's only half the story. The other half of the story is making sure it doesn't happen again and getting the right procedures in place."

The settlements follow a series of Times stories examining the cancellations and the hardships they caused for patients, their families, hospitals and physicians. Among those agreeing to settlements is a Riverside couple, described in a Sept. 17 article, who were forced to put their home up for sale after they were hit with a mountain of medical bills. Another settlement accord involves the family of a 6-year-old Murrieta girl, also described in the article, who was dropped by the insurer in the midst of treatment for a life-threatening tumor in her jaw.