Health Insurer Owes $9M for Dropping Breast
Cancer Patient in the Middle of Her Chemo
02-23-2008 8:37 AM
Los Angeles, California -- A woman who had her medical coverage
canceled as she was undergoing treatment for breast cancer has been
awarded more than $9 million in a case against one of California's
largest health insurers.
Patsy Bates, 52, a hairdresser from Lakewood, had been left with more
than $129,000 in unpaid medical bills when Health Net Inc. canceled her
policy in 2004.
On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay
that amount while providing $8.4 million in punitive damages and
$750,000 for emotional distress.
"It's hard to imagine a situation more trying than the one Bates has had
to endure," Cianchetti wrote in the decision. "The rug was pulled out
from underneath, and that occurred at a time when she is diagnosed with
breast cancer, one of the leading causes of death for women."
Bates, a mother of two, said she screamed when she heard about the
damage award.
"I am elated," she said.
Bates' attorney William Shernoff said he wanted other insurers to take
notice of the award.
"We are going to put a stop to this practice," he said.
Health Net said it was implementing a freeze on policy cancelations that
would last until the company sets up a third-party review panel to
scrutinize cases.
"Obviously we regret the way that this has turned out, but we are intent
on fixing the processes to maintain the public trust," spokesman David
Olson said.
The award came a day after the Los Angeles city attorney sued Health
Net, claiming it illegally canceled the coverage of about 1,600
patients. City Attorney Rocky Delgadillo also said the company illegally
ran an incentive program in which it paid bonuses to an administrator
for meeting targets of policy cancelations.
Health Net acknowledged that such a program existed in 2002 and 2003 but
was subsequently scrapped.
"It's hard to imagine a policy more reprehensible than tying bonuses to
encourage the recision of health insurance that helps keep the public
well and alive," Cianchetti wrote in the Bates decision.
Bates had been insured with another company but was persuaded to switch
over to a Health Net policy after an agent suggested she could save money.
She said she had undergone surgery to remove a tumor and had received
her first two chemotherapy treatments when doctors stopped treating her
because her bills were going unpaid.
"I was devastated. I didn't know what was going to happen," Bates said.
"It's boggling that someone can do that to you."
Bates went on to complete her cancer treatment through a state-funded
program.
Health Net also said it would review its practices and the way its
brokers and agents are trained.
.... He who hesitates is trampled by the mob.
___ Blue Wave/QWK v2.12
Calif. Insurance News 
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