Calif. hospitals, MDs join Blue Cross payment suit

Two of California's largest provider associations have joined a suit against Blue Cross of California, arguing that the health plan wrongly denied them payments for patients whose policies were later canceled. The California Hospital Association and the California Hospital Association are jumping into a suit originally filed by Coast Plaza Doctors Hospital and Methodist Hospital of Southern California. Consumer organizations have blasted Blue Cross, which is accused of canceling individual policies after beneficiaries need expensive treatments. Blue Cross has argued that once policies are canceled due to incomplete or inaccurate applications, the patient must pay all bills. The hospital and physician associations say that this has left them with staggering bills. (California hospitals claimed $7.7 billion in bad debt last year, though the association can't say how much was due to Blue Cross retroactive policy rescissions.) The providers contend that Blue Cross must pay for any treatment it has authorized, even if the patient's insurance is later removed or the plan decides that the patient should not have been covered. They also argue that the cancellations were themselves improper.

To get more information on the suit:
- read this Los Angeles Times article