June 20, 2008

PacifiCare Agrees to Reinstate Coverage to 60 Patients

By Mark Glover, The Sacramento Bee, Calif.

Jun. 20--The state Department of Managed Health Care and PacifiCare of California have reached a settlement to reinstate health insurance to 60 PacifiCare patients whose coverage was canceled during the past four years.

Cypress-based PacifiCare has agreed to offer coverage to three people whose coverage was canceled in the past four years and make offers to reimburse past medical claims.

The plan also will offer coverage to 57 former members and provide an expedited resolution process for disputed claims.

In May, the state reached settlements with health insurers Kaiser Permanente and Health Net to reinstate health insurance to almost 1,200 individuals whose coverage had been canceled. The state has made settlement offers to two others -- Blue Shield and Anthem Blue Cross.

For months, the state has been investigating consumer claims that their health care coverage had been unfairly canceled.

"Our goal is to restore health coverage to as many people as possible, as quickly as possible, without having to go through a lengthy legal process that may not be decided in their favor," said Cindy Ehnes, director of the Department of Managed Health Care.

"We're glad to resolve this," said PacifiCare spokeswoman Cheryl J. Randolph. "We'll continue to work with the DMHC if they have any additional issues."

State officials said the PacifiCare accord differs from those with Kaiser and Health Net. They said PacifiCare canceled, but did not rescind, patient coverage.

When a policy is rescinded, the plan has no obligation to pay current claims, leaving patients with potentially devastating medical bills for care already provided. Cancellations are more likely to occur after claims are paid, state officials said.

The state said it imposed a $50,000 fine on PacifiCare; an additional fine of $500,000 could be levied if corrective actions fall short.

Jerry Flanagan of Consumer Watchdog, a statewide advocacy group, said he was pleased about the latest settlement but concerned that patients are having to justify their claims in a process involving medical, legal and fiscal technicalities.


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