In the face of criticisms aired by California physicians that a request by Blue Cross to uncover pre-existing medical conditions of new policy holders may violate the patient-physician confidentiality, Blue Cross stopped sending letters to the doctors.

In a statement issued Tuesday, Blue Cross said, "Today we reached out to our provider partner and California regulators and determined this letter is no longer necessary and, in fact, was creating a misimpression and causing some members and providers undue concern. As a result, we are discontinuing the dissemination of this letter going forward."

Over 1,000 such letters had been sent monthly by Blue Cross to California physicians the past years, but it was only now that the insurance firm received complaints about the practice, said Shannon Troughton, Blue Cross spokeswoman.

State Governor Arnold Schwarzenegger sided with the doctors and used the incident to push for a state-wide comprehensive healthcare program.

Blue Cross canceled medical health coverage policies of Californians found to have discrepancies in their applications. It said the pre-existing medical condition probe and subsequent policy cancellations were done to curb the rise in medical cost to health insurance bills caused by medical misrepresentation.