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Wednesday, February 13, 2008

Doctors Rage at Blue Cross Letter

Doctors are "outraged" that medical insurance company Blue Cross of California sent them a letter asking them to check whether their patients had omitted to mention pre-existing medical conditions on their insurance application form. The company has now withdrawn the letter.

Richard Frankenstein, president of the California Medical Association advocacy group, told the Los Angeles Times that:

"We're outraged that they are asking doctors to violate the sacred trust of patients to rat them out for medical information that patients would expect their doctors to handle with the utmost secrecy and confidentiality."

The letter, which was sent to doctors along with a copy of their patient's insurance application form, asks:

"Any condition not listed on the application that is discovered to be pre-existing should be reported to Blue Cross immediately."

"We ask your assistance to identify medical omissions because you, being the primary care provider, will have first-hand knowledge of services provided and/or requested," the letter explains.

A spokesperson for WellPoint, who own Blue Cross, told the LA Times that enrolling applicants who did not reveal pre-existing medical conditions results in "increased utilization of services, which drives up costs for all members".

In a statement released on PRNewswire yesterday, 12th February, Blue Cross of California said that its action was nothing new. This "notification process" had been in place for years and they have never received calls or letters complaining about it. The company said it:

"Highly values the trust of its members and understands the personal relationship members have with their physicians and medical groups."

However, the insurer said it had responsibility to ensure members' records were up to date and one way it did this was to send a member's application form to his or her doctor to make sure it "mirrors what is reflected in the physician's notes for that member".

Following the reaction by the California Medical Association, Blue Cross consulted with provider partners and state regulators, and determined the letter was no longer necessary and would be withdrawn because it was "creating a misimpression and causing some members and providers undue concern".

The company urged that the letter be seen in context, saying the action only pertained to a very small fraction (0.0015 per cent) of its 8 million plus members.

Insurance companies are allowed to cancel policies where they discover the applicant has failed to reveal a pre-existing medical condition, but there are limits to how far they can go.

WellPoint is currently fighting a 1 million dollar fine imposed on it last year for inappropriately canceling health insurance policies.

The state appeals court said that insurers who wanted to cancel policies had to show that members "willfully misrepresented" their health status, or that the applications had been investigated before issuing coverage.

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