Class Action Alleges Anthem Blue Cross Underpays Non-Contracted Medical Providers

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According to a proposed class action removed to federal court, Blue Cross of California and Anthem Blue Cross Life and Health Insurance Company have, as a matter of policy, improperly reimbursed non-contracted medical providers who provide services to insured patients.

Under California law, the case explains, health insurance plans are obligated to pay “reasonable compensation” to non-contracted providers – i.e., those who have not entered into contracts with insurance plans as part of their networks – when they provide emergency services to a health plan’s enrollees up to the time that patients are stabilized.

The lawsuit alleges that Blue Cross’s claims procedures fail to recognize emergency services performed on hospital-admitted patients after they leave the emergency room but before they are stabilized. This leads to the underpayment of specialists such as surgeons and infectious disease experts who frequently provide services on admitted patients, the case says.

“Blue Cross of California does not identify and recognize these emergency, pre-stabilization services,” the complaint reads, “and unlawfully and improperly calculates payment for services based on its non-contracted rates that are well below the reasonable value of the specialists’ emergency services.”

Moreover, Anthem, the lawsuit alleges, violates California’s prompt payment laws by failing to pay health care providers or provide notice of dispute or denial within 30 working days after receipt of the claim (or 45 days if the provider is a health maintenance organization). The case claims Anthem frequently fails to make timely payments as well as pay the interest that accrues on late payments.

Finally, the suit alleges that Anthem, instead of paying the medical providers directly as required by law, remits payments to the patients themselves and unlawfully reduces the amount by the patient’s share of the cost, such as co-pays, co-insurance, and deductibles, in violation of California law. The case claims these actions were “intended to punish non-contracting providers for not entering into contracts with Anthem and thereby accepting Anthem’s lower reimbursement rates.”