Major news today from Los Angeles, where the Department of Managed Health Care (DMHC) announced settlement agreements with Kaiser Permanente and HealthNet to automatically restore coverage to over 1200 patients who had their coverage rescinded.
Lisa Girion of the Los Angeles Times, who’s been on this story like a hawk, has an early story.
Here’s the Department of Managed Health Care’s press release and text of the actual settlements with the two insurers. Kaiser had the bulk of the rescissions–over 1,000, even though they stopped the practice two years ago. The real question now is whether the other leaders in the individual market–Blue Shield, and especially Blue Cross, will also come to terms.
A few weeks ago, consumer advocates stood with the DMHC Director Cindy Ehnes when they announced that all of the 5,000+ people who had their coverage retroactively rescinded since 2004 would be provided an independent review process so that they can get their past treatments paid for, get appropriate restitution, and get reinstated for coverage going forward.
These settlements go beyond that, in getting the plans to reinstate the patients without the uncertainty and administrative hassle of a review, and with the agreement not to challenge the reinstatement in court–something that some plans were threatening.
We appreciate the Department’s focus on getting people their care and coverage first and foremost. We are pleased that over a thousand patients will get reinstated without further procedural barriers and heartache. The patients will appropriately be made whole for the expenses they have had to bear, but also ensured coverage so that are not left alone and abandoned, uninsured and uninsurable because of their so-called pre-existing conditions.
And while we think the fines don’t match the scale of the insurer’s wrongdoing, the priority is to make the patients whole, and to make sure they have coverage. We appreciate the focus on back-end enforcement of this settlement and the possibility of much steeper fines, and hope the Department adopts a ‘zero-tolerance’ policy for further bad behavior by these insurers.
Thousands of other patients are waiting to see if their health plan will agree to a settlement, or if they will have to go to a more cumbersome process to get coverage, either through the Department or in court. It’s sad that after all the attention on this reprehensible practice by insurers, we don’t have the entire industry seeking to make this right.