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California Attorney General Subpoenas Major Health Carriers Over Denials, Rates

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California Attorney General Edmund Brown Jr. has subpoenaed financial records and other documents from the state’s 7 largest health carriers.

The investigation was spurred partly by reports of large health insurance rate increases, and partly by reports that the largest carriers may be rejecting more than 39% of the claims that they receive, officials say.

Brown is asking the carriers to provide information about:

- How much they are spending on health care.

- How much they are spending on marketing, administration and profits.

- How they review claims and decide how much to pay doctors and hospitals.

- Member and medical provider complaints, including complaints about payment delays, reduced payments and denials of claims, and the health plans’ responses to those complaints.

- How health plans determine doctor and hospital rankings, and “whether those rankings mislead customers on quality.”

- Whether the health plans intend to raise premiums, and, if so, whether the plans disclosed the amount and frequency of the premium increases at the time of enrollment.

- Whether the health plans offer alternative policies to members when they increase premiums and whether the plans can deny enrollment in the alternative policies based on preexisting conditions.

The carriers receiving letters are Aetna Inc., Hartford (NYSE:AET); Blue Shield of California, San Francisco; CIGNA Corp., Philadelphia (NYSE:CI); Health Net Inc., Woodland Hills, Calif. (NYSE:HNT); Kaiser Permanente, Oakland, Calif; and units of UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH) and WellPoint Inc., Indianapolis (NYSE:WLP).

The new subpoenas focus on “pay for service” plans, rather than health maintenance organization; earlier, officials say, the same companies received subpoenas about their HMOs.

“We have been looking at these companies for a number of months and are very concerned that some of them are unjustly raising premiums and denying payment of legitimate claims,” Brown says in a statement.

Aetna has told California news organizations that it is cooperating with the attorney general’s office, and the others have said they cannot yet comment because they have not received the subpoena.