Blue Cross stops controversial letter

Facing a torrent of criticism Tuesday, Blue Cross of California abruptly halted its practice of asking physicians in a letter to look for medical conditions that could be used to cancel patients' insurance coverage.

In a statement issued about 6 p.m., the state's largest for-profit insurer said, "Today we reached out to our provider partners and California regulators and determined this letter is no longer necessary and, in fact, was creating a misimpression and causing some members and providers undue concern.

"As a result, we are discontinuing the dissemination of this letter going forward."

The announcement came after blistering rebukes Tuesday by physicians, patients, privacy experts and officials including Gov. Arnold Schwarzenegger and Sen. Hillary Rodham Clinton, D-N.Y.,health club after the Los Angeles Times disclosed the practice.

The letters sent to holders of individual policies in the state came just months after Blue Cross was fined $1 million by the state for unfairly revoking coverage to scores of its policy holders.

"For a company that has gotten a real black eye over the issue of rescinding coverage over the past year - to actually be more aggressive rather than less is simply stunning," said Anthony Wright, executive director of HealthAccess California, a health care advocacy organization.

"It certainly is not a position physicians want to be put in," said Dr. Dean Didech, chief medical officer of the San Jose Medical.

Group, a group of 70 local physicians health club. "It really is a problem between the doctor-patient relationship."

In a letter to physicians last week, Blue Cross asked the doctors to "identify members who have failed to disclose medical conditions on their applications that may be considered pre-existing."

It went on to say that "Blue Cross has the right to cancel a member's policy back to its effective date for failure to disclose material medical history health club."

In a statement earlier Tuesday, Blue Cross defended the letter, saying that it "highly values the trust of its members and understands the personal relationship members have with their physicians and medical groups." But it also has a responsibility to make sure its records are accurate.

This letter could never have been written, Wright said, if legislation that stalled in the California Legislature earlier this month had been enacted into law. Among other things, the legislation would have meant that insurance companies couldn't deny coverage based on health status.

Didech put it this way: Medical insurance companies should be forced to provide policies to everyone, "just like a driver's license."

Some 19 million Californians receive their health insurance through their employers - and because of the market power of group coverage, insurance companies accept all of a company's workforce. Another 10 million Californians are covered through such public programs as Medi-Cal or Medicare. It's the remaining 2 million or so who buy coverage as individuals who were targeted by the Blue Cross letter.

Those people tend to be freelancers and independent consultants, the jobless, early retirees, employees of small businesses without insurance, or entrepreneurs starting new businesses.

The California Medical Association, a group of 35,000 doctors in the state, had called on the state Department of Managed Health Care that regulates the health insurance industry to order Blue Cross to rescind the letter and stop these "deeply disturbing, unlawful" practices.

"As long as no charges are filed and they're collecting premiums, it's OK. But when the bill comes, then they investigate the background," complained Dr. Anmol S. Majal, a gastroenterologist in Fremont and past president of the California Medical Association.