This is the model complaint text provided on lobblyline.com
on January 2003.
COMPLAINT AGAINST CAREFIRST under the
Deceptive Marketing Practices Act, DC Statute § 31-3407, and any other
relevant consumer protection laws of D.C. , the U.S. and any other relevant
My family has a health insurance policy with CareFirst and like
approximately 8,000 families in the Washington area, we use Children's
Hospital's first rate medical staff and facilities for our family's medical
care. On January 31, 2002 CareFirst is scheduled to end coverage of care at
Children's for CareFirst subscribers.
I am writing to file a two-pronged complaint against CareFirst Blue Cross
Blue Shield charging them with violation of the Deceptive Marketing
Practices Act for (1) deceptive marketing and (2) improper rates. CareFirst
BlueCross used Children’s as a carrot to lure me into its policy, keep me
there, then caused me to rely upon this policy to my detriment, turning down
other opportunities for insurance coverage at Children’s, only to then
eliminate Children’s from the network to cut costs, leaving me with no
comparable health care provider. Therefore, I seek the remedy that allows me
to continue to use Children's physician's, facilities and services at the
same level as I have done under the policy up to now, and at the same or
similar in-network rates as before, and I do not want to be responsible for
large advance payments under a CareFirst reimbursement scheme for payments
due to Children’s.
BACKGROUND ON MY CHILD’S CONDITION
My child needs medical care for a particular condition. Children’s provides
the best medical care for my child. I will accept nothing less than the best
for my child because anything less than the best compromises the well being
of my child. CareFirst would have me believe that it is acceptable for me
and are requiring me to seek out medical care for my child from other
providers and at adult hospitals. I can not obtain the same quality care or
facilities from other providers outside Children’s. I need to continue to
use the doctors and facilities at Children’s Hospital.
DECEPTIVE MARKETING: ONE HAS TO QUESTION WHETHER CAREFIRST HAS TOLD
ANYONE AFFIRMATIVELY, CLEARLY AND PERSONALLY OF THEIR INTENTION TO DROP
CHILDREN’S FROM THEIR NETWORK
One of the most significant reasons that I obtained a CareFirst BlueCross
BlueShield policy is that I needed access to Children's for the medical care
of my child.
CareFirst failed to give me adequate and fair notice of its decision to stop
offering coverage for use of Children’s and its services when CareFirst had
a reasonable expectation that it would discontinue participation in
Children’s insurance network as far back as 2001. I contend that it was then
that CareFirst made its plan to terminate the Children’s contract since it
wanted to improve its desirability for the purposes of converting to a
for-profit. CareFirst should have notified me that its application to
convert and merge could affect the providers in its network.
CareFirst is reported to have not directly, personally or individually
informed people that its coverage would end at Children’s – even to this
day. It is widely believed that the way that most policyholders found out
was either (1) by word of mouth or (2) Children’s hospital written
notifications (some dated November 4). Many policy holders report that
CAREFIRST MARKETED COVERAGE AT CHILDREN’S WITHIN A FEW SHORT WEEKS OF ITS
CONTRACT EXPIRATION AT CHILDREN’S.
CareFirst may claim that it had no intention to end its contract with
Children’s in 2001 while preparing its application for conversion. However,
at the very least, CareFirst had a reasonable expectation that it would
terminate coverage at Children’s by the end of summer 2002 and early fall of
2002 when negotiations with Children’s were looking grim. Yet CareFirst told
The records of negotiation dates and memoranda would likely support this
contention. Even as negotiations clearly deteriorated and the December 31st
contract expiration date approached – through most of November – many if not
most policyholders likely had heard nothing from CareFirst about their
intention to leave Children’s on December 31.
Examine closely the dates when negotiations plummeted as against the
expiration date of the contract between CareFirst and Children’s -- December
31st, 2002. If the contract expired on December 31st good faith action by
CareFirst would have had them declare September 31st the deadline for ending
negotiation talks for good in order to give families a fair and reasonable 3
months (6 months is the ideal) of notice of the termination. So why didn't
they tell us? It's simple - that would have caused a mass departure of
members from the CareFirst plan at the first opportunity - the open
enrollment season that fell in October for some and December for others.
Susan Frazier-Harris of Alexandria Virginia is known to have received her
notification of termination on November 20, 2002. This is the first date
that I know of in which anyone received notification of termination from
CareFirst. It strains credulity to believe that up to the eleventh hour,
November 20, 2002, CareFirst really believed that it would reach a deal with
Children’s Hospital. CareFirst knew that it would not and continued to
represent otherwise to prospective CareFirst enrollees and me, a current
policy holder that it might make a deal.
CAREFIRST ALLOWED TWO OPEN ENROLLMENT SEASONS TO PASS WITHOUT INFORMING
POLICY HOLDERS IT WAS LEAVING CHILDREN’S.
Moreover, two open enrollment seasons – one for local Fairfax County
employees and one for federal government employees - opened and closed
during the protracted negotiations between CareFirst and Children’s, and
CareFirst made no affirmative good faith effort to inform its members using
Children’s personally and individually of its scheduled contract termination
with Children’s. From October 1 – October 31, Fairfax County had advertised
in its Employee Handbook that there was ‘no change’ to the CareFirst
insurance plan. The federal government’s open season occurred from December
1st – December 31st. Some reports, including in the Washington Post,
indicate that many federal employees failed to receive clear and complete
notice of the change in coverage.
By September 2002, prior to the open enrollment season, we should have been
told by CareFirst that talks had soured and were NOT likely to resolve with
coverage at Children’s in September of 2002. That way, we could have
exercised the option to obtain a policy with another insurance carrier.
Instead, CareFirst decided to deceive me and its other policyholders.
CAREFIRST DECEIVES THE COUNTY OF FAIRFAX, VIRGINIA
On November 4, Children’s informed many parents that CareFirst would no
longer insure their child’s care at Children’s. By that time, the Fairfax
County open enrollment season had just ended as of October 31. THIS WAS
BLATANT AND ILLEGAL DECEPTION BY CAREFIRST. The Fairfax County Board of
Supervisors, in their November 18, 2002 ‘Board Matter,’ the record of their
meeting, indicates that they had been unaware of the scheduled contract
termination. Thus, they, too, had been deceived by CareFirst. Susan Harris,
of Alexandria Virginia, indicates and an allusion is in the record to this
effect, that she was left the task of bringing the contract termination
issue to the attention of Fairfax County officials. It was really
CareFirst's job to do this.
TIMING OF ENROLLMENT AND FAILURE OF CAREFIRST TO TELL POLICYHOLDERS.
I was duped by CareFirst because until recently they have been marketing
their insurance plan as one that offers access to Children’s Hospital. At
the time that I enrolled I was informed through CareFirst material, among
other information, that I could use Children’s. Then, in the early Fall
2002, I became aware that CareFirst would no longer cover visits or services
at Children’s Hospital. They duped me instead.
CareFirst behaved in illegal and deceptive behavior when it failed to tell
me that it was in the midst of unsuccessful negotiations that would likely
lead to no coverage of policyholders using Children’s. CareFirst did not
tell me. They lied by omission. They broke the law.
No matter when policyholders enrolled in CareFirst, I believe that CareFirst
has been misrepresenting the services and doctors that it will insure by
omitting mention of its contract dispute with Children’s. I have heard
reports that some policyholders enrolled in CareFirst within the past couple
of months and have not been told about the removal of Children’s from the
CareFirst network. This is the clearest sign of deception since it is
reasonable for CareFirst to have had an expectation of leaving Children’s.
Some of us policyholders have joined in the past year or so, since the
for-profit conversion process ensued. I contend that CareFirst knew it would
drop Children’s in the belief that it was too expensive for its for-profit
aspirations. Finally, there are those policyholders who have been insured
with CareFirst for better than 20 years. However, although these long-time
policyholders enrolled well before CareFirst established its intention to
remove Children’s from their network because of the for-profit merger or
because of difficult contract renegotiation, long-time policy holders too
were deceived. What the majority of CareFirst insured members have in common
is the fact that they remained in the network of CareFirst through at least
one open enrollment season in late 2002, when contract negotiations had
drastically deteriorated, when CareFirst were legally obligated to inform
its members that it would no longer cover their care at Children’s.
CareFirst did not. CareFirst deceived them as well.
THE EFFECTS OF THIS DECEPTIVE MARKETING: DETRIMENTAL RELIANCE
Had I known CareFirst was ending coverage at Children’s I could have better
safeguarded my child’s health. Any day, my child may suffer for not having
access to Children's. My child could become critically ill and experience
grave medical consequences without access to Children’s. I cannot afford to
continue to use Children’s without CareFirst coverage – either out of
network or out-of-pocket. I have no other options. What of parents with
doctors’ appointments after January 31st? They are having almost zero
success with getting CareFirst coverage at Children’s as a ‘medical
necessity’. We can not afford to purchase an individual policy with an
insurance carrier that does cover Children’s. Now that we have begun care at
Children’s. CareFirst are leaving us in the lurch. What kind of care will my
child receive now?
CareFirst vastly reduces the quality and range of medical care it can cover
by leaving Children's. Thus, the rates it is charging me based upon these
services are improper and in violation of the law. Terminating the contract
with Children's makes the rates improper.
I charge that CareFirst’s actions were taken intentionally to get my
business and to get my employer’s business. They deceptively marketed the
policy to me and my family. CareFirst is also violating the law against
I seek any and all remedies that are allowable under the
laws of the District of Columbia and any other relevant jurisdictions.
First, I want to be restored to coverage at Children's Hospital for as long
as I am insured by CareFirst.
Second, in the alternative, I want to keep using Children's if CareFirst
does eventually drop Children's from its network of covered providers. I
want to continue to pay affordable fees at the in-network rates that I was
originally promised that I would receive. I want an arrangement that allows
Children's Hospital to bill CareFirst so that I do not have to advance
payments and then pursue reimbursement at my own risk.