Locking horns once again with Blue Cross of California, the California Medical Association, along with other incensed players, scored a mid-February victory by pressuring the health plan to stop sending letters to its doctors seeking their help in rescinding patient coverage. In a Feb. 8 letter to the California Department of Managed Health Care, the CMA asked the agency to order Blue Cross to cease and desist from requesting physicians to reveal certain patient data, and to order the company to tell physicians to ignore previous requests.

Calling the letters part of an effort to maintain accurate member records that created a "misimpression," Blue Cross said in a Feb. 13 statement that it would stop sending them to physicians, citing CMA pressure and discussions with regulators. Blue Cross estimated that 120 such letters had been sent over a period of "several years," adding that "to date [the company has] not received any calls or letters of concern" regarding the letters. Peggy Hinz, a Blue Cross spokeswoman, was not able to answer before press time whether Blue Cross had requested physicians to ignore the letters.

"We certainly will be monitoring their compliance," says Lynn Randolph, the DMHC's deputy director of communications. Should the agency find that Blue Cross has violated its rules, possible ramifications for the company include the CMA's requested cease-and-desist order and monetary penalties, she said. The DMHC had not received any complaints about the letters from physicians, and first heard about them from the CMA, she added.

The CMA alleges that Blue Cross' practice violates physician-patient trust, as well as state Health and Safety Code section 1389.3, which prohibits health plans from revoking coverage after issuing a patient contract based on incomplete medical underwriting. Also, the CMA says that Blue Cross is "very likely disclosing protected health information in violation of the [U.S.] Health Insurance Portability and Accountability Act," when it sends patients' health coverage applications to its physicians for reasons not covered under the law's definition of "healthcare operations."

Asked whether Blue Cross had rescinded coverage from any of its members as a result of the letters, Hinz wrote to Southern California Physician saying, "No one has identified that anyone was ever rescinded from this communique."

The letter Blue Cross sent to physicians reads, in part, "The purpose of providing you with this copy is to help you identify members who have failed to disclose medical conditions on their application that may be considered pre-existing." The letter later continues, "Within the first [two] years of membership, Blue Cross has the right to cancel the member's policy back to its effective date for failure to disclose material medical history."

As a result of a separate investigation, the DMHC fined Blue Cross $1 million in March 2007, finding that it had not properly conducted medical underwriting prior to issuing contracts.

--Chris Womack, chrisw@socalphys.com