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California Hospital Association and California Medical Association Join Class Action Complaint Challenging Blue Cross Rescission Policy

Submitted by: Hooper, Lundy & Bookman, Inc.

Categories: Business Ethics, Health & Wellness

Posted: Apr 19, 2007 – 04:12 PM EST


Apr. 19 /CSRwire/ - LOS ANGELES--(BUSINESS WIRE)--April 19, 2007--The national health law firm of Hooper, Lundy & Bookman, Inc., today filed an amended complaint as the next step in the quest by California health care providers to stop Blue Cross of California, Blue Cross Life and Health, and their parent company, Wellpoint, Inc. from denying health care claims by attempting to rescind the patients' insurance coverage after the services have been provided to the patients.

The amended complaint includes the California Hospital Association, on behalf of its nearly 450 member hospitals, and the California Medical Association, on behalf of its 35,000 physician members, as additional plaintiffs to join the class action complaint that was filed in October 2006, by Coast Plaza Doctors Hospital, against Blue Cross of California, Blue Cross Life and Health, and their parent company, Wellpoint, Inc.

"The decision by CHA and CMA to join in the class action indicates the broad scope of the problem being caused by Blue Cross' rescission practices. We believe that Blue Cross has failed to pay claims worth hundreds of millions of dollars based on its illegal practices," said Daron Tooch, one of the lead attorneys in this case. "Blue Cross'
rescissions appear calculated to push providers to bill and collect from their patients what Blue Cross itself has an obligation to pay,"
explained Mr. Tooch. "This conduct by Blue Cross is precisely what California law is intended to prevent."

The Department of Managed Health Care recently determined that Blue Cross' rescission practices violated the Knox-Keene Act, and the DMHC levied a $1 million dollar fine against Blue Cross.

The Complaint seeks to protect patients, hospitals, and physicians from Blue Cross' illegal practice of retroactively rescinding insurance policy coverage for patients after the health care services have been provided by the providers. The complaint explains that California law prohibits Blue Cross from retroactively denying payment after the services have been provided in good faith. The class action and amended complaint follow lawsuits that were filed by Hooper, Lundy & Bookman in May, 2006, on behalf of a number of specific hospital clients, challenging these types of retroactive policy rescissions.

"Unfortunately, it appears that Blue Cross' rescission practices are not isolated to particular providers, but reflect a systematic practice by Blue Cross to avoid paying for these claims," explained Glenn Solomon, another one of the lead attorneys for the lawsuit.

Blue Cross has been the subject of dozens of lawsuits by patients alleging that Blue Cross routinely looks for after-the-fact reasons to cancel policies by reviewing previously approved applications. The rescissions directly impact the hospitals and physicians, because they are not being paid for their services, and instead are being directed by Blue Cross to collect from the patients.

"The entire health care system is at jeopardy when insurers do not pay valid claims based on improper rescissions," noted Mr. Solomon.
"Not only do patients and providers suffer when valid claims go unpaid, but also rescinded patients are pushed onto the rolls of the uninsured, which strains limited public resources."

About Hooper, Lundy & Bookman, Inc.: Hooper, Lundy & Bookman's litigation lawyers are regularly engaged in complex litigation involving hospitals and health systems, as well as other health care providers. The firm's litigation department regularly assists provider clients with litigation, arbitration and mediation services that have resulted in numerous favorable judgments and new case law. With clients in 47 states and offices in Los Angeles, San Francisco and San Diego, the firm is the largest law firm in the country dedicated solely to the representation of health care providers. For more information, visit the firm's website at

Copyright Business Wire 2007

For more information, please contact:

Daron Tooch Hooper, Lundy & Bookman, Inc.
Phone: 310-551-8192
Fax: Cell: 310-702-8192
Glenn Solomon Hooper, Lundy & Bookman, Inc.
Phone: 310-551-8179
Fax: Cell: 310-503-2553


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