Practice Management Alert

Anthem Blue Cross and Blue Shield (BCBS), the largest for-profit health insurer in California, allegedly broke the law more than 700 times between 2006 and 2009, says a top lawmaker in that state.

According to the Los Angeles Times, California Insurance Commissioner Steve Poizner claims Anthem repeatedly failed to pay medical claims on time and misrepresented policy provisions to customers. The state is suing Anthem to the tune of $7 million.

"We believe there is evidence to suggest there are serious issues with how Anthem Blue Cross pays claims," Poizner said during a news conference.

Many of the violations stem from allegations that the company did not pay patient claims within the 30 days required by California state law, officials said.

WellPoint, Inc., the Indiana-based parent company of Anthem, released a statement which vowed full cooperation with the suit, yet downplayed its importance, stating, the "review represents a small fraction" of its claims.

Anthem has also proposed rate hikes of as much as 39 percent for customers with individual policies in California -- a move that has drawn the ire of consumers and regulators as well as from Congress and the president. If the proposed rate increases go through, it would affect 800,000 individual policy holders in California.

In other news: A recent study by Pricewaterhouse Cooper's Research Institute finds that of every dollar spent on healthcare, 50 cents gets wasted. According to a report by CNN.com, the 2008 study found that of the $2.2 trillion spent on healthcare nationwide, price gouging makes up $1.2 trillion of that amount.

Rich Umbdenstock, president and CEO of the American Hospital Association believes hospitals mark up costs to adjust for reduced payments from Medicare and Medicaid. "They're making up for underpayments elsewhere," Umbdenstock said.

The report also concludes the decisions a doctor makes about patient care is another contributor to waste. The variety of treatment options account for an estimated $10 billion of unnecessary cost each year, according to the report.