Health Net ordered to pay $9mil after cancelling cancer patient's policy

  1.,0,187355.storyHealth Net ordered to pay $9 million after canceling cancer patient's policy

    1:14 PM PST, February 22, 2008 The punitive damage award is the first of its kind and has prompted the giant medical insurer to scrap practices that have recently come under fire. By Lisa Girion, Los Angeles Times Staff Writer
    A breast cancer patient whose medical coverage was canceled by her insurer was awarded more than $9 million today in a case against Health Net Inc., one of the state's largest for-profit insurers.

    The award issued by an arbitration judge was the first of its kind and prompted Health Net to announce it was scrapping its cancellation practices that are under fire from state regulators, patients and the Los Angeles city attorney.

    [​IMG] Arbitration winner
    [​IMG] click to enlarge

    [​IMG] PDF
    Bates Arbitration award
    (Acrobat file)

    Arbitrator Sam Cianchetti, a retired Los Angeles County Superior Court judge, found that Health Net violated numerous state laws in canceling Patsy Bates' policy and declared the company's actions "despicable."

    Cianchetti also blasted the company for tying employee bonuses to the number of policies canceled and the amount of money saved.

    "It's difficult to imagine a policy more reprehensible than tying bonuses to encourage the rescission of health insurance that keeps the public well and alive," he said in a 21-page opinion.

    Woodland Hills-based Health Net responded by announcing substantial changes, including a pledge that it would not cancel policyholders "in the future without first seeking approval from a binding external third-party review process."

    Bates, a mother who owns a Gardena hair salon, screamed with delight when she heard the news, said William Shernoff, the Claremont lawyer who represented her.

    "The punitive damage award will do more than anything else to stop the shameful practice of canceling health insurance after people become seriously ill," Shernoff said.
  2. wow, thats incredible.....thanks for posting this article, Ill use it in my Managed Health Care class :ty:
  3. It's truly heinous to do that in someone's darkest hour.
    She deserves every penny for what she went through.
  4. I dunno.. I think appeals may reduce that, although I think it's very appropriate given the inappropriate nature of the breach. Honestly, people who have had their contracts cancelled should file a class action and share in the profits - make the courts go for a disgorgement remedy !!!
  5. i agreee the amount is too muhc...BUT big corporation been abusing their power on individiual for too long... its abt time something get done..:yes:
  6. ^ I disagree. The amount awarded is usually not a matter of what would be "too" much to give to the victim, but how much would hurt the OFFENDER. The fact that $9mil is a lot to the victim is merely a bonus for them.

    Then again, I find the logic flawed in the first place. Instead of thinking, good we're hurting the offender at least a little with such a big law-suit, we first think oh no, that's more than a victim deserves. Since when do we put a tag on that?? JMHO..
  7. ^ True true!
  8. The lawyers will get half, 60% if its appealed.
    I hope someone is paying her BILLS now & she doens't have the extra stress while she is trying to get better.
  9. they just had an extended news story on this - apparently they canceled her policy because she "underestimated" here weight on her health care policy application.

    Are you kidding me? This was the kind of minor "error" or "falsification" the company was using to cancel policies after patients became sick and needed care. They went back to the original application, first physical, etc to see if there were any inconsistencies and if there were, and the cost of care would be too great, then there was an immediate cancellation.

    HealthNet should have been dinged for more! A company that should be looking out for the care of their patients was really trying to just collect premiums and then, use any excuse they could find to not provide service.

    On a lighter note - if "underestimating" your weight were an issue for canceling something, then I'd be out of health insurance, a drivers license, a job, and who knows what else! :lol:
  10. I'm soooo happy this happened!! :tup: Insurance companies are corrupt
  11. Sad, but true. It is my understanding that private health insurance is first and foremost a business that wants to make profits, not spend -or rather, lose- money on their clients.
  12. The only way companies like this are going to learn is to hit them where it hurts the most, the pocketbook. Had they taken care fo the woman as she paid for, it wouldn't have cost them so much. But this is their way... spend a million to save 250,000.

    Sadly, I can now see other folks who were insured through them also having their policies canceled or they don't get proper payment because of a huge reward. Someone always pays and it's not the CEO's of these companies.
  13. :tup: Agree!

    One Chemo treatment is going to cost thousands of dollars and a hospital stay of a week alone (if needed) is going to be tens of thousands of dollars, not counting surgery if she needed if. If she had a masectomy it is going to cost even more. They charge you for the anstehsiologist (spelling is wrong, I know). They charge you for the IV, they charge you for your antibiotic, they charge you if you turn on your TV (I'm not kidding). I can certainly see a simple case of Breast Cancer alone costing millions of dollars to cure. On top of that the woman needs to pay her legal bills. I don't think 9M is out of line at all.
  14. You know...this really isn't true. There are legitimate Ins Co's that are simply doing their job. It seems that this is the only business segment that when one or three companies are documented as being corrupt, the public assumes all the rest are as well. It's like saying "GM was found discriminating against female auto owners" then replying "Car manufacturers are corrupt!"
    Think about how often you've been to the Dr or the hospital and your claims have been paid and handled correctly for a second. The issue with healthcare isn't corrupt insurance companies, it's with the whole system. Malpractice insurers, pharmaceutical companies, litigation lawyers, cost of education..etc etc.
  15. Insurance companies are for-profit entities, so since that is the case, they will continue to make these types of decisions because they can. The settlement she was awarded is a drop in the bucket for them.

    I have a much different view of health insurance companies now than I did a few months ago. My husband had a life threatening illness in the fall and since that time the dealings I've had with our health insurer have been surreal. I won't get into details now but let's just say that most people think their insurer is OK but that's when they are healthy. Wait until you or someone in your family gets sick. :s