Consumer concerns about new health plan networks continue, with two new members suing over a preferred provider network they say was deceitfully marketed.
John Harrington and Alex Talon, both previously uninsured residents of San Francisco, are suing Blue Shield of California, after each purchased an individual preferred provider organization plan and were denied reimbursement for treatment they received earlier this year from providers that seemed to be included in their PPOs.
Seeking changes to the company's provider network communication practices as well as damages, the two men's lawyers argue that Blue Shield's PPO network marketing violated a number of state laws, including the False Advertising Law and section 332 of California's insurance code, the requirement that the subscriber and issuer "communicate to the other, in good faith, all facts" of the contract.
Late last year, Harrington used Covered California's shop and compare tool to see which providers are included in plans he was considering, and eventually bought the Blue Shield "Enhanced Silver 73 PPO" plan, in part because the network seemed to include providers where he was seeking treatment for an unspecified condition.
Before starting treatment, he checked the Blue Shield website and saw that the provider was listed as accepting his plan, and he also called to confirm with the practitioner. After treatment, though, according to the lawsuit, Blue Shield informed him that the provider was not a part of the plan's PPO network and denied payment, leaving him to pay out-of-pocket.
Talon had a similar experience with Blue Shield's "Ultimate Plan (Platinum 90)" -- seeing providers he planned to use listed in the PPO network online, getting treatment, and then being told later the provider wasn't included in the network.
The two consumers purchased the plans "based on misrepresentations, concealments or failure to disclose" the physician network that would be available to them, the lawsuit alleges. The Blue Shield PPO has a vast statewide network of 60,000 physicians and 351 hospitals, but Harrington and Talon "had available to them only a very narrow network of providers," the lawsuit alleges.
In the explanation of benefits, the lawsuit argues, the insurer "fail(ed) to disclose" that "there is not a singular Blue Shield network of providers, but multiple networks of providers," some of them "substantially different or lesser than the Blue Shield of California PPO network displayed on Blue Shield's website." The explanation of benefits also fails to fully explain that some PPO providers are available only to certain plan members, Harrington and Talon's lawyers maintain.
The two PPOs are among nine different individual policies with multiple benefit tiers that Blue Shield sold through the Covered California exchange.
Harrington and Talon are filing as the two main defendants trying to bring a class action, representing all Californians currently or within the past four years enrolled in a Blue Shield individual or family PPO.
Blue Shield of California, which sold more than a quarter of all new individual policies in the last open enrollment period, is reviewing the lawsuit and holding off on commenting on the specific allegations.
"We believe enrollees should be as informed as possible about the products they select," the company said in a statement.