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Read Making a Killing

home / healthcare / in the media

Los Angeles Times
May 05, 2005

by Debora Vrana, Times Staff Writer

WellPoint Unit Dealing With Botched Bills;

Nearly 47,000 Blue Cross of California customers were charged premiums as much as five times too high in April.
A little more than a week before it is slated to meet with state regulators, WellPoint Inc. is wrestling with a billing snafu in which almost 47,000 of its California customers were charged premiums in April that were as much as five times too high.

WellPoint's Blue Cross of California subsidiary said this week the overcharges were accidental and that all of the wrongly collected money had been returned.

The problem was a "technical issue" that was identified and rectified as quickly as possible, Blue Cross spokesman Michael Chee said. It affected Blue Cross customers who have their premium payments automatically withdrawn each month from their checking accounts or billed to their credit cards.

"We jumped on it," Chee said. "We issued a letter to everyone that was affected with an apology. We believe the problem has been fixed so it won't happen in the future."

That wasn't good enough for Irene Arnold, a 41-year-old teacher's aide in Stockton who had $1,110 taken out of her account April 1 rather than the typical $222 monthly Blue Cross payment. Arnold, a mother of two, said she was forced to use her credit cards for food and gas until Blue Cross refunded the money two weeks later.

"You panic. All of a sudden your money is gone," said Arnold, who said she was looking for another health insurer. "The stress level is incredible. I got the runaround for weeks, then a form letter."

Blue Cross of California is the biggest health insurer in the state with 8 million policyholders.

Lynne Randolph, a spokeswoman for the state Department of Managed Health Care, said the agency was looking into the situation.

"We're very concerned that if members were overcharged they are made whole," Randolph said. She said the department had received only two complaints about the problem.

If consumers aren't made whole, the department can punish Blue Cross by assessing penalties, Randolph said.

WellPoint is already facing a public meeting in Sacramento on May 13 at which state health regulators are expected to address concerns that the insurer increased premiums this year to help offset costs of its acquisition by Indianapolis-based Anthem Inc.

Anthem completed its $21-billion acquisition of Thousand Oaks-based WellPoint Health Networks Inc. in November, creating the biggest health insurer in the country with 28 million members. Anthem then took the name of WellPoint.

The billing foul-up has angered consumer advocates, many of whom had been vocal critics of the WellPoint-Anthem marriage last year.

"Simply repaying the overcharges, fees and interest is not enough," said Jerry Flannigan of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer advocacy group. "Blue Cross must be punished to ensure the company gets the message."

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