California local prosecutors allowed to sue health insurers coverage denials

The AAJ yesterday cited a Los Angeles Times report that a decision last month by the California Court of Appeal in Los Angeles opened the door for increased scrutiny of health insurers’ practice of rescinding the policies of sick patients. According to the Times the court ruled “that local prosecutors could sue health insurers over the way they treat consumers,” in “a high-stakes lawsuit accusing Anthem Blue Cross of California of violating state business laws by selling the promise of insurance but rescinding coverage after policyholders submit claims for costly medical care.” It was also reported that Blue Cross argued that its “rescission practices fell under the jurisdiction of the state Department of Managed Health Care and not the Los Angeles city attorney’s office,” but “the appellate court rebuffed those arguments, saying the law was ‘unambiguous’ in giving the city attorney the authority to sue.” Allowing local prosecutors to sue the health insurers hopefully will prevent frivolous denials of benefits by the insurers.