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Guest
February 23, 2008
Insurer That Cut Client's Care Fined $9M
By THE ASSOCIATED PRESS
Filed at 1:43 p.m. ET
LOS ANGELES (AP) -- 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.
Insurer That Cut Client's Care Fined $9M
By THE ASSOCIATED PRESS
Filed at 1:43 p.m. ET
LOS ANGELES (AP) -- 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.
