John Michael Jensen, Attorney at Law www.johnjensenlaw.com
LITIGATION for MISREPRESENTATION, UNFAIR BUSINESS PRACTICES against ANTHEM – CALPERS promotion, sale, reimbursement of PPO health insurance (pers choice, care select Gold) regarding OUT-OF-NETWORK SERVICES
Misrepresentation
Intro Misrepresentation Unfair Business Practices
Again, through years of work and litigation, Heinz discovered that Anthem and
CalPERS created a double, compounded reduction: Anthem and CalPERS (1) reduced the base Allowable Amount out of network reimbursements, which was not disclosed, and then also (2) further reduced the lower base rate by 60% (which Anthem and CalPERS did advertise as one of the significant benefits or advantages of the coverage.), so that the subscribers were paid 60% of an often much lower base rate for their out-of-network reimbursement.
Anthem then received a percentage of the reduced reimbursements that otherwise would have benefitted subscribers. Secretly Anthem received “incentive payments” and profits associated in large part with Anthem reducing reimbursements. Anthem and CalPERS did not disclose that Anthem had a profit incentive to reduce reimbursement.
CalPERS and Anthem’s misrepresentations and concealment made the PPO
coverages and “out-of-network” benefits appear substantially more advantageous and more valuable than they were. Anthem’s and CalPERS’ misrepresentations about the PPO’s benefits, advantages, and terms enticed individuals to buy, enroll, and re-enroll in PPO coverage, pay higher premiums, seek “out-of-network” services, and submit more “out-of-network” claims.
Material Misrepresentations DIstributed Across Class in Long Term Advertising Campaign
State-wide, CalPERS and Anthem directed the PPO coverages at CalPERS members who wanted reimbursement for “out-of-network” services. Exhibit 24-26, 28, 39 -53, 55, 62-104. Each year from 2008 to 2015, about 325,000 members enrolled in Anthem and CalPERS’ PPO programs. H02134.
Between 2006 and 2013, CalPERS and Anthem widely distributed Health
Program Guides, Health Benefit Summaries, and other promotional material that contained material misrepresentations. Anthem and CalPERS represented that the reimbursement for out-of-network medical service differed by a percentage of charge, higher co-payment, higher co-insurance, or higher percentage from the reimbursement for in-network medical service.
Examples
For example, in August 2006, CalPERS and Anthem wrote, distributed, and made available a “Health Program Guide”(HBD-120) (,“HPG”) which read, “You must use doctors in the PPO provider network or pay higher co-insurance (percentage of charges)” and “A PPO is similar to a traditional “fee-for-service” plan, but you must use doctors in the PPO provider network or pay higher co-insurance (percentage of charges). p. 16.5 Exhibit 77.
In August 2006, CalPERS and Anthem also wrote and distributed a “Health
Benefit Summary” (HBD-110) that stated, “Your cost” for PPO (“in-network”) services in PERS Choice would be 20%, and “Your cost” for non-PPO (“out-of-network”) services in PERS Choice would be 40%. It also represented that “Your cost” for PPO services under PERS Care would be 10% and “your cost” for Non-PPO services under PERS Care would be 40%
Some Examples Include:
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Misrepresentation AND OMISSSION
CalPERS and Anthem omitted, concealed, and failed to disclose that the base
Allowable Amount for “out-of-network” medical services could be substantially lower than the base Allowable Amount for “in-network” services, for the same service.
Anthem and CalPERS representations were deceptive, unfair, misleading, and,
false including because the difference was not only in “percentage of charge,” co-insurance, or co-payment, it was also in the lower base “Allowable Amount” reimbursement rate that CalPERS and Anthem used for out of network reimbursement.
Other Examples
Again, through years of work and litigation, Heinz discovered that Anthem and
CalPERS created a double, compounded reduction: Anthem and CalPERS (1) reduced the base Allowable Amount out of network reimbursements, which was not disclosed, and then also (2) further reduced the lower base rate by 60% (which Anthem and CalPERS did advertise as one of the significant benefits or advantages of the coverage.), so that the subscribers were paid 60% of an often much lower base rate for their out-of-network reimbursement.
Anthem then received a percentage of the reduced reimbursements that otherwise would have benefitted subscribers. Secretly Anthem received “incentive payments” and profits associated in large part with Anthem reducing reimbursements. Anthem and CalPERS did not disclose that Anthem had a profit incentive to reduce reimbursement.
CalPERS and Anthem’s misrepresentations and concealment made the PPO
coverages and “out-of-network” benefits appear substantially more advantageous and more valuable than they were. Anthem’s and CalPERS’ misrepresentations about the PPO’s benefits, advantages, and terms enticed individuals to buy, enroll, and re-enroll in PPO coverage, pay higher premiums, seek “out-of-network” services, and submit more “out-of-network” claims.
John Michael Jensen, Attorney at Law www.johnjensenlaw.com
Anthem CALPERS PPO HEALTH INSURANCE LITIGATION 