Physicians, Insurers Clash Over Medical Necessity in CA

Joe Cantlupe, for HealthLeaders Media , September 27, 2012

The regulatory procedures allow Health Net members to "seek review of Health Net decisions by medical professionals who are not affiliated with Health Net," according to the statement, provided by Health Net spokesman Brad Kieffer.

Health Net, through its subsidiaries, provides and administers health benefits to approximately 5.5 million individuals across the country, including 2.3 million members in California. Based in Woodland Hills, Health Net reported $11.9 billion in revenues last year.

This isn't the first time that Delgadillo has initiated a significant lawsuit against insures. Delgadillo reminded me that as Los Angeles city attorney a few years ago, he started litigation that upended several of the procedures that now have an impact on insurers.

In late 2011, Blue Shield of California agreed to pay $2 million to the city and county of Los Angeles to settle claims that the company improperly rescinded coverage from hundreds of sick members before 2008. Degadillo's Los Angeles City Attorney's Office sued Blue Shield and other insurers in 2008.

The Patient Protection and Affordable Care Act has made it illegal for insurers to rescind coverage except in cases of internal fraud, Delgadillo says.

The inevitable impact of the latest lawsuit against insurers remains to be seen.

"All I can hope is that history repeats itself," Delgadillo says, referring to the Blue Shield case that ended in his favor. "It's like Margaret Mead said, 'a small group can change the world'."

Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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