PO BOX 12785
LA JOLLA, CA 92039-2785
TEL: (858) 997-6415
FAX: (858) 997-2111
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This case was about a broken promise. My client needed some nasal surgery done and was insured by Blue Cross of California. The surgery would cost about $10,000. She would pay 25%, about $2,500 and Blue Cross was supposed to take care of the rest. Her medical provider contacted Blue Cross to obtain authorization for the surgery. The Blue Cross agent gave authorization and she had the surgery. About two weeks after the surgery, Blue Cross denied payment because she had been on the plan for only 10 months. They said if she had been on the plan at least 12 months, they would have paid. California law provided that a waiting period does not apply if the insured had been covered under a prior health plan and there was no gap in coverage. Blue Cross had, in fact, administered her prior health plan before she switched to the new plan. Try as she might, no one at Blue Cross would investigate to confirm the prior coverage. After seeing several other attorneys, she came to me. First we proceeded with her policy benefits arbitration and won that. Then we proceeded with an insurance bad faith claim. At the time, I was unaware that a class action suit had been filed regarding the same issues in Los Angeles. Blue Cross was fighting the class action suit. Their strategy was to force each claimant to arbitrate their claim, thinking that they would win all the cases that way. Were they in for a surprise!
Blue Cross brought a number of motions, but we won every one. About a week before our hearing, I learned about the class action lawsuit. Speaking to the attorney in charge, he said our case had gone farther than any other that he was aware of. He wanted me to let him know the results of our case. The hearing in front of a retired judge (This was commercial arbitration through the American Arbitration Association) lasted an entire day. It would be 30 days before we learned what the ruling was. It was a slam dunk! My client was awarded over $900,000 of which $750,000 was for punitive damages against Blue Cross to punish and make an example of them. Below is a copy of the check we received from Blue Cross in payment of the award.
BAD FAITH CLAIM AGAINST BLUE CROSS