LOS ANGELES (CN) – A member of the California Public Employees Retirement System has filed a class action complaint accusing the retirement system and Anthem Blue Cross of unlawfully paying out-of-network medical expenses below accepted industry standards for reimbursement rates.
Brad Heinz sued CalPERS and Anthem in Los Angeles County Superior Court on Tuesday, claiming Anthem told members of the retirement system that it would pay 60 percent of out-of-network medical expenses under preferred provider organization (PPO) health plans. Instead, CalPERS and the health insurance company manipulate the allowable amount of benefits under their plans to “greatly reduce” reimbursements to members, Heinz claims in his lawsuit.
That means members end up bearing more of the cost than they should, Heinz says.
When Heinz’s cognitive therapist went out of network and stopped contracting with Anthem, the Indianapolis-based insurer paid Heinz $45.15 to $82.12 for each session when it should have reimbursed him at a rate of $120 or more, he says.
“CalPERS and Anthem cannot string together a series of technicalities that purportedly allow CalPERS and Anthem to provide greatly reduced reimbursements irrespective of other terms requiring a higher reimbursement consistent with UCR [usual, customary, and reasonable reimbursement rates] and industry standards,” the 93-page lawsuit states.
The number of employees and retirees who have PPO health care plans are currently unknown, according to the lawsuit, but CalPERS currently has 1.6 million active and retired members.
Heinz’s class action complaint alleges breach of contract, breach of fiduciary duty, unjust enrichment and other counts and seeks damages or reasonable reimbursement.
Heinz also filed a petition Tuesday asking the state court to accept his claim as timely even though California’s Government Claims Program said that he had waited too long to file when CalPERS and Anthem rejected his class action claims in an administrative decision.
He is represented by Los Angeles attorney John Jensen.
Anthem and CalPERS declined to comment on the allegations in the lawsuit.