Unfair Business Practices

Anthem CalPERS PPO (PERSCare PERSELECT PERSChoice) Litigation, Proposed Class Action

Unfair Business Practices- Restitution of Monies Transferred to Anthem as Incentives or Secret Profits Gained As Percentage of Reduced Reimbursement

Unfair Business Practices. (Anthem) Anthem misrepresented, concealed, and falsely advertised in tandem with and as part of one of Anthem’s unfair business practices. By misrepresenting the “out-of-network” reimbursement terms of the PPO coverages as more favorable than how Anthem administered the actual reimbursement to be[1], Anthem enticed more Plaintiffs to buy PPO coverage, pay higher premiums, seek more “out-of-network” medical services (including in lieu of “in-network” services), and submit more “out-of-network” claims. Additional “out-of-network” claims provided Anthem more opportunity to reduce the “out-of-network” reimbursements as a means to increase its fees under the Claim Target Guarantee. Heinz alleges on information and belief that Anthem received significant fees, incentives, or profits as a result of its unfair practices.
Even if CalPERS could provide Anthem complete discretion to determine the Allowable Amount for “out-of-network” reimbursement simultaneously with a profit incentive to reduced reimbursements, Anthem and CalPERS cannot misrepresent the PPO policy terms.

[1] In the reimbursements, Anthem maintained the appearance that Anthem and CalPERS were abiding by the different percentage of charges described in its promotional material, but in fact also reduced reimbursements by reducing the Allowable Amount of out-of-network claims.

Unfair Business Practices

Anthem Gained Compensation or Secret Profits That Resulted From and Was Determined In Relation to The Amount of Reduced Reimbursement that Anthem Paid Members, Particularly By Reducing the Reimbursement for Out-of-Network Medical Services.

CalPERS and Anthem entered into a Health Benefits Administration contract in 2007 that gave Anthem a profit incentive for reducing the total reimbursement on a year-to-year basis. The contracted profit incentive gave Anthem a percentage of the amount that Anthem reduced reimbursements to subscribers. The terms incentivized Anthem to reduce reimbursements for out-of-network services in particular.

At the same time, CalPERS gave Anthem discretion to set the Allowable Amount base rate and the reimbursement amount. CalPERS did not oversee Anthem and was uninformed of the purportedly “propriety” methodology. The profit incentive transferred money to Anthem that should have been reimbursed to subscribers.

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Anthem’s and CalPERS Wholly Controlled Administrative Process to Deny, Frustrate, and Delay Claims and Law Suits.

CalPERS and Anthem delayed, stalled, and denied Heinz due process. The Evidence of Coverage (“EOC”) for the PPO coverage required that Heinz present and exhaust his individual claims and claims on behalf of another in Anthem and CalPERS’ wholly controlled multi-tiered administrative process.

Heinz timely filed individual claims for Dr Walker’s “out-of-network” services and also gave CalPERS and Anthem notice of class claims about these matters starting in 2008 in the Anthem “grievance” process.

Anthem denied higher reimbursement. As the EOC required, Heinz appealed in CalPERS administrative process. CalPERS took jurisdiction in a paper review in about 2009. CalPERS delayed the administrative process for more than 6 years. Heinz was diligent. After a truncated evidentiary process limited to one specific issue that CalPERS chose to litigate in its Statement of Issues, the ALJ issued a Proposed Decision against Heinz. Heinz filed a Government Claims act filing.

After denying reconsideration, the CalPERS Board finalized a Decision against Heinz. Heinz timely filed a proposed Class Action Complaint with Petitions for writs challenging the CalPERS decision. Heinz also filed a Petition for Writs challenging the GCA decision. The original judge sustained a demurrer.

In an unpublished case, the Second District Court of Appeal reversed and remanded the Fraud related causes of action, Unfair Business Practices, and Breach of fiduciary duties with direction. The trial then sustained a demurrer to the Breach of Fiduciary duties. The decision overruled the demurrer to the misrepresentation, fraud, and unfair business practices causes of action. The court allowed Heinz to condense his 120 or so -page SAC complaint to a 30-page TAC that is currently before the court.

Introduction Misrepresentation Unfair Business Practices Example of Class Rep Class Claims