California Physicians Continue Fight Against Rescissions

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 14 Aug 2009 - 8:00 PDT

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The California Medical Association (CMA) and the Los Angeles County Medical Association (LACMA) have filed an amicus brief supporting a lawsuit filed against Blue Cross of California for illegally cancelling patients' health insurance policies.

Last year, the Los Angeles City Attorney filed a lawsuit on behalf of the people of California against the insurer for false advertising and unfair business practices. The suit alleges that Blue Cross sold people false promises of coverage, while systematically cancelling policies after policyholders got sick and filed expensive claims. This practice is known as rescission.

"Blue Cross put patients at risk both financially and medically at a time when they were in the most need of their insurance," said Dr. Robert Bitonte, president of the Los Angeles County Medical Association. "Physicians and hospitals were left holding the bag for services rendered in good faith, often with prior authorization."

At issue in this case is whether public prosecutors, acting on behalf of private citizens, have the right to sue insurers for violations of state law or if the state Department of Managed Health Care (DMHC) has exclusive jurisdiction to enforce violations of the Knox-Keene Act. The DMHC has repeatedly failed to enforce the Knox Keene Act against HMOs, leaving it up to others to hold insurers accountable.

"If justice were left solely up to the DMHC, patients would continue to be disappointed," Dr. Bitonte concluded.

In order to help protect patients from this practice, this year the California Medical Association has sponsored Assembly Bill 2, authored by Assemblymember Hector De La Torre, D-Southgate. AB 2 protects the public from illegal rescissions by requiring insurers to continue coverage until an independent board reviews the matter and makes a decision as to whether a rescission is legal. The bill is currently in the Senate.

Last year, CMA and De La Torre teamed up to pass similar legislation - AB 1945. Despite the bill's bipartisan support and Governor Schwarzenegger's criticism of the practice of rescission, the governor vetoed the legislation, leaving Californians exposed to this insidious practice.

Link to CMA's Amicus brief

Source
The California Medical Association