Just When You Need Your Health Insurance, You Have Been Revoked!
Nationwide scrutiny has landed in the sector of San Francisco’s private health insurance after a series of events involving patients’ coverage being rescinded when they most needed it. The attention followed the case of Patsy Bates who was awarded $9 million by an arbitration judge when Health Net Inc. cancelled her insurance coverage while she was undergoing chemotherapy in 2004.
Other questionable practices have drawn notice such as letters sent out by Blue Cross of California asking doctors to verify pre-approved patient accounts and health histories. Some reports identify such tactics as offering financial incentives to employees who make rescissions.
After customer complaints of unfair coverage cancellation, the state’s Department of Managed Health Care began an investigation. But the problem might not be limited to California. While insurers feel responsible to control fraud and ensure patients are being honest on their profiles, industry groups and consumers agree to an independent third-party review board creating more transparency within the application process.
The National Association of Insurance Commissioners in Kansas is helping with this process by creating a standardized application. Kansas also introduced an external review program for assessing the medical necessity of policies and coverage that the insurers deny, and many states are following this lead. Some companies like Health Net are stepping up to fix things by organizing an independent review process. Spokesman David Olsen attests that the company’s business practices are sound. Still others in the industry maintain that a standardized application process could do the most to help avoid omissions, which can vary greatly.
Dennis Barry of a Washington health care law firm says California’s dispute is a reflection of the recently failed effort by the state to adopt universal health care, an initiative pushed heavily during most of last year by Republican Gov. Arnold Schwarzenegger.
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