Anthem Sued Over Network Issue

Anthem Blue Cross of California misled “millions of enrollees” about whether their doctors and hospitals were participating in its new plans, and failed to disclose that many policies wouldn’t cover care outside its approved network, according to a class action lawsuit filed earlier this month.

As a result, many consumers have been left on the hook for thousands of dollars in medical bills, and have been unable to see their longtime doctors, alleges the suit by Santa Monica-based advocacy group Consumer Watchdog.

Anthem spokesman Darrel Ng declined to comment directly on the lawsuit. He said Anthem has agreed to pay the claims of those who received treatment from inaccurately listed doctors during the first three months of the year. 

The suit claims that Anthem, California's largest individual health insurer, delayed providing full information to consumers until it was too late for them to change coverage. Anthem also failed to disclose it had stopped offering any plans with out-of-network coverage in four of the state's biggest counties: LosAngeles, Orange, San Francisco and San Diego.

Anthem “intentionally misrepresented and concealed the limitations of their plans because it wanted a big market share,”said Jerry Flanagan, an attorney with Consumer Watchdog. 

The suit also comes as Consumer Watchdog helped place a measure on the November ballot that would give the state's insurance commissioner greater authority to veto rate increases. 

The litigation reflects growing consumer pushback against so-called “narrow network” health plans, which are increasingly common, especially on the Covered California exchange and federal marketplaces. 

Anthem was a major player on California’s insurance exchange and the suit includes those who bought coverage online, as well as directly from the insurer. 

Insurers have defended plans with limited provider networks as a way of holding down premiums. 

The Consumer Watchdog lawsuit names six Californians who purchased Anthem plans. Among them is Betsy Felser, M.D., of Pasadena, who had coverage with Anthem for 20 years. Like hundreds of thousands of Anthem customers, she received a letter late last year stating that her preferred provider organization, which allows for in and out-of-network care,was being cancelled, according to the lawsuit. The letter suggested a replacement Anthem plan “with the benefits you have come to count on.”

Before agreeing to switch, Felser said she checked with five Anthem telephone representatives, making it clear she wanted to be in a PPO.“I would never have gotten anything that wasn’t a PPO plan,” said Felser, whose insurance also covers her young son. “They said they would give me the same coverage.”

Felser also checked Anthem’s website and the doctors she sees, including her son’s pediatrician, to make sure they were participating in the plans she was considering and was assured that they were, she said. During those calls, none of Anthem’s representatives told Felser that the insurer was no longer offering PPOs in LosA ngeles County, the lawsuit alleges. Nor did they tell her that the Anthem plans offered in her area would not cover care provided by out-of-network doctors or hospitals, according to the lawsuit. And when she received her identification cards, they were stamped with a PPO symbol. But when Felser tried to use thecoverage, she found out her doctors – and her son’s pediatrician – were not in the network and that the plan was an exclusive provider organization (EPO), an extremely limited type of plan which pays nothing for out-of-network care.“It pays zero, so I essentially have no coverage,” said Felser.

Anthem, while declining to comment on the Consumer Watchdog suit, had answered questions last week about an earlierl awsuit that raised similar issues. Ng said then that consumers were informed about what kind of plan they purchased, along with details about out-of-network benefits, in packets they received soon after enrolling.

 “All those materials clearly spelled out type of planthey were receiving,” he said. But consumers would have to dig deep in a brochure on the Anthem website to find a footnote to a page 9 chart indicating that EPO plans have no out-of-network benefits. Ng noted that Anthem’s EPO and PPO networks have the same doctors and hospitals for people with individual policies, although only the PPOs have out-of-network benefits. In recent weeks, Anthem said it has added 3,800 doctors to its networks.

As for the PPO symbol on identification cards, Ng said that it had been intended to protect consumers who sought emergency care out of state,in keeping with Blue Cross Blue Shield Association rules. 

But consumers say the damage was done. Josh Worth of Los Angeles said he was unable to get accurate information after receiving notice that his Anthem plan would be cancelled at the end of 2013. He said he called Anthem, as well as all

the doctors he used to be sure they were participating in the network.

“They all said, ‘yes, we’re going to be continuing to accept all Blue Cross PPOs,’ and that’s what I was told I was going to be getting,” said Worth, a graphic artist..

Worth received an ID card in late February that called his plan a “Pathway Tiered PPO,” according to the lawsuit. His son was born on March 31. Not long after, he said he began receiving bills from his wife’s obstetrician, who was not in the network.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.