Orange County Business Journal

Monarch HealthCare Sued by Blue Shield

Vita Reed Wednesday, February 29, 2012

Blue Shield of California said today that it is suing Irvine-based Monarch HealthCare, A Medical Group Inc.

San Francisco-based Blue Shield alleges that Monarch refused to treat its members and “committed multiple breaches of contract” while under a three-year provider contract that took effect in January 2010.

The alleged breaches include Monarch’s recent sale to Optum, a unit of Minnesota-based United HealthGroup Inc.

Blue Shield said the Optum-Monarch deal was made without its consent, and Monarch then solicited Blue Shield members to join other healthcare plans and refused to treat some Blue Shield members, according to the lawsuit.

Blue Shield eventually told Monarch that it would terminate its commercial and Medicare HMO contracts effective May of this year.

Monarch called Blue Shield’s allegations into question.

“We object to the mischaracterizations made by Blue Shield,” said Bart Asner, Monarch’s chief executive, in a statement.

He said Monarch “(considers) it our responsibility to always act in the best interest of patients.”

Blue Shield is seeking damages of $10.5 million in the complaint.