Anthem Blue Cross Accused of Bait & Switch

     SANTA MONICA (CN) — A class action in California accuses Anthem Blue Cross of planning a bait-and-switch scheme to begin on Jan. 1, by terminating its Preferred Provider Organization health plans and switching to Exclusive Provider Organization, limiting choice and violating the federal health care law.
     Los Angeles resident Paul Simon, 42, sued Blue Cross of California dba Anthem Blue Cross on Monday in Superior Court, for breach of contract, breach of faith and business-code violations.
     Exclusive Provider Organization plans, or EPOs, unlike PPOs, provide no out-of-network coverage, limiting the choice of physicians and care.
     Simon has a medical condition that requires him to use several out-of-network providers to which he would lose access, as well as one in-network doctor that he sees, his attorney Laura Antonini said in an interview.
     “This really affects his personal coverage,” said Antonini, who is with Consumer Watchdog in Santa Monica.
     Antonini said the bait-and-switch mentioned in the lawsuit is the method Anthem uses to renew its coverage.
     “In an effort to retain its market share, Anthem is failing to adequately inform its members that they are losing out-of-network benefits for 2017,” she said.
     According to the complaint, Anthem lost a lot of customers the last time it canceled its plans and replaced them with less comprehensive coverage. So this time, in September, it sent out a misleading renewal packet that said that, though the plans will “change” on Jan. 1, customers will be automatically re-enrolled in similar coverage.
     Premiums will increase by 33 percent.
     “This change leaves customers potentially facing thousands of dollars or more in medical bills that would have been covered under their existing plan,” the complaint states. “Anthem knows that if consumers were informed that coverage is being withdrawn from the market and replaced with entirely different coverage as the law requires, consumers would take a closer look at their options, including health plans offered by other companies.”
     Anthem’s renewal packet did not fulfill numerous federal and state legal requirements, the complaint states.
     For example, if Anthem wants to make a change in the type of plan it offers, it must “discontinue the coverage and issue a new product.” This requires one form notifying customers of the discontinuation and a different form of notice when a plan is renewed. Since this was not done correctly, and federal and state laws require 90-day notice, Anthem must renew the original plans, according to the complaint.
     Open enrollment for health coverage began Nov. 1 and consumers who renew their Anthem coverage by that date will be locked in for another year, the lawsuit states.
     Simon seeks class certification and an order enjoining Anthem to renew the PPO plans through 2017, plus punitive damages and costs of suit.
     “We believe that Anthem is trying to take advantage of consumers during the open enrollment period,” said Travis Corby, another of Simon’s attorneys. “They are selling 2017 Affordable Care Act health plans as being the same as their 2016 products. … Existing customers are being completely misled.”
     Anthem Blue Cross spokesman Darrel Ng said the company is committed to providing access to high-quality, affordable health care and is making the changes so it can keep monthly premiums affordable.
     “The benefit package being offered in 2017 was approved by the Department of Managed Health Care and Covered California, and is consistent with federal guidance,” Ng said. “Affected members have been mailed written notice of this change so they can make an informed decision on their health care needs during the open enrollment period for the coming year. We believe plaintiff’s case is without merit.”
     Attorney Corby is with Shernoff Bidart Echeverria in Claremont.