LA Sues Blue Cross, Max Penalty Could be Over $1 Billion

For the second time, City Attorney Rocky Delgadillo is suing a health plan provider, the first being Health Net Inc. in February. Today, the announcement to sue Anthem Blue Cross of California and Anthem Blue Cross Life & Health came after launching www.protectingtheinsured.org, a city website to "law enforcement investigation regarding denial of health insurance claims or coverage due to unlawful, fraudulent or unfair practices." The website lets consumers directly make complaints to the city.

"The company has engaged in an egregious scheme to not only delay or deny the payment of thousands of legitimate medical claims but also to jeopardize the health of more than 6,000 customers by retroactively canceling their health insurance when they needed it most," Delgadillo told the LA Times. "We further allege that more than 500,000 consumers have been tricked into purchasing largely illusory healthcare coverage based upon the company's false promise."

Blue Cross, of course, disagrees. If Los Angeles wins, Delgadillo says after a fine of $2,500 to $5,000 per violation, the maximum penalty could be more than $1 billion.

In December, a Northridge girl died after Cigna initially denied a liver transplant saying it was "experimental," but eventually reversed their position a short few hours before the teenager died after public protests at their Glendale office.

Photo by José Goulão via Flickr