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Hooper, Lundy & Bookman Negotiates 11.8 Million Settlement for California Hospitals in Blue Cross Rescission Class Action

Posted on: Monday, 7 July 2008, 15:00 CDT

On behalf of the California Hospital Association and all California hospitals, Hooper, Lundy and Bookman, Inc. has negotiated a landmark $11.8 million settlement with Blue Cross of California, Blue Cross Life and Health and their parent company, Wellpoint, Inc., in a class action relating to rescission of patients' policies. The lawsuit, filed in October, 2006, alleges that Blue Cross illegally rescinded patients' health care insurance policies after the patients received services at California hospitals. (Case No. BC360235 (CCW)).

"We are very pleased to have come to an agreement with Blue Cross that fairly reimburses hospitals for the services they provided to Blue Cross members and protects the patients from being liable to pay for those services," said Hooper, Lundy & Bookman attorney and co-plaintiff counsel, Daron Tooch.

Under terms of the Memorandum of Understanding approved by the court today:

-- Blue Cross will establish a Facility Compensation Fund to reimburse hospitals for the services they provided to rescinded members.

-- Blue Cross will establish a Patient Reimbursement Fund to reimburse patients for payments they made to hospitals after their policies were rescinded.

-- Hospitals will cease collection activities against rescinded Blue Cross members for claims that were not paid by Blue Cross due to policy rescissions.

"The practice of rescinding patients' policies after the patient has received medically necessary services causes a great deal of financial stress to both the patients and the hospitals who provide those services. This settlement goes a long way towards compensating the hospitals for those services and providing closure to the patients for these debts," said Hooper, Lundy & Bookman attorney and co-plaintiff counsel, Glenn Solomon.

Background

Hooper, Lundy & Bookman, Inc. filed a class action complaint against Blue Cross in October, 2006, seeking to establish protection of hospitals statewide from the practice by Blue Cross of California, Blue Cross Life and Health, and their parent company, Wellpoint, Inc., of retroactively rescinding insurance policy coverage for numerous patients after the health care services have been provided by the hospitals. The complaint explained that California law prohibits Blue Cross from retroactively denying payment after the services have been provided in good faith.

Blue Cross has been the subject of dozens of lawsuits by patients alleging that Blue Cross routinely looks for after-the-fact reasons to cancel policies by reviewing previously approved applications. But the rescissions also directly impacted the hospitals, because they were the ones not being paid for their services, and instead were being directed and forced by Blue Cross to try to collect from their patients.

About Hooper, Lundy & Bookman, Inc.: Hooper, Lundy & Bookman's litigation lawyers are regularly engaged in complex litigation involving hospitals and health systems, as well as other health care providers. The firm's litigation department regularly assists provider clients with litigation, arbitration and mediation services that have resulted in numerous favorable judgments and new case law. With clients in 47 states and offices in Los Angeles, San Francisco and San Diego, the firm is the largest law firm in the country dedicated solely to the representation of health care providers. For more information, visit the firm's website at www.health-law.com.

Source: Business Wire

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