Tuesday, May 30, 2023 | Back issues
Courthouse News Service Courthouse News Service

Class Claims Blue Shield Knew It Overcharged

LOS ANGELES (CN) - Blue Shield of California knew a computer glitch overcharged members for prescription drugs but failed to inform customers or correct the errors, according to a class action lawsuit.

Lead plaintiff David Hoffman on Friday sued California Physician's Service dba Blue Shield of California, in Superior Court.

Hoffman claims that Blue Shield's computer system failed in late September, affecting its members' prescription-drug benefit.

As a result of this error, when insured members bought a brand-name prescription drug, "Blue Shield's computer system treated the member's applicable prescription-drug deductible as if it had been completely unsatisfied," Hoffman claims. "In addition, the system thereafter failed to allow any further purchases of prescription drugs to accumulate toward the deductible for members."

Hoffman claims that Blue Shield learned of the computer problem shortly after it occurred - that members who had satisfied their prescription-drug deductible would be overcharged, and that it would take weeks to repair the problem.

But Blue Shield chose not to inform members about the error, the complaint states.

"It did not notify members that they had been overcharged for brand-name prescriptions that had been filled after the problem manifested in its computer system," Hoffman claims. "Nor did it warn them that, until the problem was rectified, they would be overcharged when they filled brand-name prescriptions."

As a result of the error, Hoffman says he paid $245.82 for Nexium in October instead of $70, and paid $320 for Celebrex in October instead of $70.

"Hundreds of thousands of Blue Shield members have been similarly affected by the computer-system error and have been overcharged for their prescriptions because Blue Shield's computer system failed to recognize that their deductibles had been satisfied," Hoffman says in the complaint.

Blue Shield declined to comment Monday.

Hoffman seeks class certification, restitution, an injunction, and damages and punitive damages for breach of contract, tortious breach of faith, fraudulent concealment, and business code violations.

He is represented by Jeffrey Ehrlich, of Encino.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.