Insurer that cut client's cancer care fined $9M

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forwarding

 

One of our members send us this news story which appeared on CTV News which

you might find interesting. Thanks Joanne.

 

LydiaLydia E Neilson M.S.M.

President/CEO

National ME/FM Action Network

_http://www.mefmaction.net

 

 

 

_ (http://www.mefmaction.net/)

Insurer that cut client's cancer care fined $9M

Updated Sat. Feb. 23 2008 1:02 PM ET

 

The Associated Press

 

LOS ANGELES -- A woman who had her medical coverage canceled as she was

undergoing treatment for breast cancer has been awarded more than $9 million in

a

case against one of California's largest health insurers.

 

Patsy Bates, 52, a hairdresser from Lakewood, had been left with more than

$129,000 in unpaid medical bills when Health Net Inc. canceled her policy in

2004.

 

On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay that

amount while providing $8.4 million in punitive damages and $750,000 for

emotional distress.

 

" It's hard to imagine a situation more trying than the one Bates has had to

endure, " Cianchetti wrote in the decision. " The rug was pulled out from

underneath, and that occurred at a time when she is diagnosed with breast

cancer,

one of the leading causes of death for women. "

 

Bates, a mother of two, said she screamed when she heard about the damage

award.

 

" I am elated, " she said.

 

Bates' attorney William Shernoff said he wanted other insurers to take

notice of the award.

 

" We are going to put a stop to this practice, " he said.

 

Health Net said it was implementing a freeze on policy cancelations that

would last until the company sets up a third-party review panel to scrutinize

cases.

 

" Obviously we regret the way that this has turned out, but we are intent on

fixing the processes to maintain the public trust, " spokesman David Olson

said.

 

The award came a day after the Los Angeles city attorney sued Health Net,

claiming it illegally canceled the coverage of about 1,600 patients. City

Attorney Rocky Delgadillo also said the company illegally ran an incentive

program

in which it paid bonuses to an administrator for meeting targets of policy

cancelations.

 

Health Net acknowledged that such a program existed in 2002 and 2003 but was

subsequently scrapped.

 

" It's hard to imagine a policy more reprehensible than tying bonuses to

encourage the recision of health insurance that helps keep the public well and

alive, " Cianchetti wrote in the Bates decision.

 

Bates had been insured with another company but was persuaded to switch over

to a Health Net policy after an agent suggested she could save money.

 

She said she had undergone surgery to remove a tumor and had received her

first two chemotherapy treatments when doctors stopped treating her because her

bills were going unpaid.

 

" I was devastated. I didn't know what was going to happen, " Bates said.

" It's boggling that someone can do that to you. "

 

Bates went on to complete her cancer treatment through a state-funded

program.

 

Health Net also said it would review its practices and the way its brokers

and agents are trained.