The largest organizations representing California physicians and hospitals joined a lawsuit against Blue Cross of California on Thursday, accusing the state's largest health plan of illegally and routinely refusing to pay them millions of dollars for medical care provided to enrollees whose policies were later canceled.
The move puts the doctors and hospitals on the side of patients, regulators and consumer advocates who have criticized Blue Cross and its competitors for canceling individuals' policies after they incur costly treatment. Such cancellations have left some patients with significant financial or medical hardships.
Blue Cross, owned by Indianapolis-based WellPoint Inc., defends the practice, saying it cancels policies only after determining that individuals submitted incomplete or inaccurate applications for coverage. In such cases, the insurer contends, the patients are responsible for paying the doctors and hospitals.