Editor’s Note:
The DMHC hearing originally set for July 19 has been rescheduled to 10 a.m. Tuesday, Aug. 7 at a new venue: Junipero Serra Building, Carmel Room Auditorium, 320 W. 4th St, Los Angeles.
The California Department of Managed Health Care will hold a public hearing in Los Angeles next week, in response to complaints about how Blue Cross of California’s parent company has conducted business since a 2004 merger that moved its corporate headquarters out of state.
WellPoint Inc. which merged with its Indiana Blue Cross counterpart Anthem and moved it home office to Indianapolis, has come under fire for alegedly retroactively cancelling policies of sick patients, strong-arming doctors and hospitals into signing less favorable contracts, and “up-streaming” dividends from the California operation to the parent company at higher levels than allowed under a transition agreement with state regulators.
“As we approach the end of the three-year merger agreement period, it is essential that the public have an opportunity to gain insight into Blue Cross’ compliance with the legal commitments made to the people of California as a result of this multi-billion dollar merger,” said DMHC director Cindy Ehnes said in a statement released Monday. “We must have assurances that Blue Cross’ number one goal is to provide quality health care, not simply increase its profitability.”
Wellpoint’s agreement with the state, which runs through November 2007, limits dividends to $500,000 a year, yet the California unit recently reported to the state that it had transferred $950,000 to the parent company in the first three months of this year.
Ehnes said she also expects discussion concerning the need for timely payment of doctor and hospital claims, affordable health insurance products, and the insurer’s participation in Medi-Cal and Healthy Families programs during the hearing, which will take place from 10 a.m. to 3 p.m., on Thursday, July 19 in the auditorium of the Ronald Reagan State Building, 300 South Spring St.
“We value our relationship with the DMHC and are always open to a constructive dialogue with them on any issues they may bring forth,” said Peggy Hinz, a spokeswoman at Blue Cross of California’s Thousand Oaks headquarters.
