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Blue Cross & Blue Shield Accused of Acting in Bad Faith in Denying Coverage

Blue Cross Blue Shield's logo on a building.

"Lansing, Michigan, USA - March 14, 2012: The Blue Cross Blue Shield location in Lansing, Michigan. Founded in 1929, the Blue Cross Blue Shield Association is a network of insurance organizations that insure almost 100 million Americans."

Charles Mandracchia filed a lawsuit in the Court of Common Pleas in Philadelphia County against healthcare provider Independence Blue Cross & Blue Shield (IBC) which the defendant moved to the Eastern District of Pennsylvania on Monday. The plaintiff sued the health insurance giant over their failure to cover claims he submitted after receiving care in late 2020 and early 2021, shortly after he turned 65 when it asked him to sign up for Medicare.

Through the lawsuit, Mandracchia is seeking damages and demanding a trial by jury arguing that he thought he had full coverage because he had continued paying Blue Cross & Blue Shield each month. The company, however, claimed that it told him that they would not cover charges that could be covered by Medicaid.

The plaintiff purchased a group policy from IBC through his law firm, Mandracchia Law, LLC. He also purchased an additional policy to supplement his group plan, a plan called the Blue Cross Blue Shield Personal Choice PPO Gold Referred, which cost him an additional fee of $1,330 every month.

In August of 2020, Mandracchia turned 65 and IBC notified him that he needed to sign up for Medicare A & B. Mandracchia signed up for Medicare A, which was provided at no cost to him, but did not want to sign up for Medicare B since he was already paying for coverage under his Personal Choice plan. He asserted that he “knew of other people who were 65 or older and were still under the group health insurance plan from the company for which they worked and were not enrolled in Medicare.” The plaintiff was unaware that Medicare B was required for him since his policy group had less than 25 members.

IBC reportedly communicated to the plaintiff that it would not pay any bills that Medicare would pay, but still billed the plaintiff for the full amount of his Personal Choice plan from August 2020 when he turned 65 until the end of the contract period in March 2021.

The plaintiff had a severe case of sciatica in late November 2020. The filing said he was “unable to walk or be mobile due to severe pain running down his back through his leg causing severe spasms.” The condition he was in caused him to be rushed to the hospital, 3 days later he was discharged despite still having symptoms. The next day, he was rushed to a different hospital and discharged after 5 days.

Following the two hospital stays, the plaintiff went to see a pain management specialist. The specialist treated him with spinal injections to remedy the pain. He also received physical therapy. IBC did not pay for the medical services or ambulance services despite continually billing the plaintiff for the policy each month. Due to this misconduct, the plaintiff alleged that the defendant fraudulently induced the plaintiff into the $1,330 a month policy and led him to believe he had full coverage under the plan.

Despite Mandracchia exhausting all of his administrative remedies to get IBC to cover his medical expenses, they refused to pay. He has paid IBC a total of $10,640 for his insurance policy, but no health care coverage has been provided, the plaintiff claimed. The complaint contended that throughout the policy period, “IBC never intended to pay for plaintiff’s medical expenses as promised,” and that the “denial of coverage posed a substantial risk to plaintiff’s health and well-being.”

The complaint cited breach of contract, bad faith, violation of Pennsylvania’s Unfair Trade and Consumer Protection Act, and intentional infliction of emotional distress. As a result of the misconduct, Mandracchia is seeking favorable judgement in an amount in excess of $50,000, punitive damages, litigation fees, and other relief deemed appropriate.

The plaintiff is represented by himself, while the defendant is represented by Robinson & Cole.

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