State regulators are scheduled to announce Thursday "an agreement with a major California health plan to reinstate health coverage immediately to enrollees rescinded of coverage since 2004."
But even before Thursday’s planned announcement by the California Department of Managed Health Care, Consumer Watchdog claimed, according to its health industry sources, that DMHC was "considering a deal" that would let Kaiser Permanente avoid paying medical bills for patients whose previous coverage wascanceled.
The Santa Monica-based statewide advocacy group also claimed Wednesday that the alleged deal would limit Kaiser’s future legal liability to patients who were left uninsured when they got sick and needed coverage the most.
Late Wednesday, DMHC officials declined to comment on the announcement scheduled Thursday in Los Angeles, and when asked about the Consumer Watchdog allegations, DMHC spokeswoman Lynne Randolph said: "We’ll address those issues tomorrow (Thursday)."
On April 17, Cindy Ehnes, director of DMHC, ordered immediate reinstatement of more than two dozen patients whose insurance coverage was rescinded by three insurers. At that time, she said the health plans would be required to pay all medical claims of the patients involved.
Ehnes also ordered independent review of thousands of other "rescissions" made by the state’s five largest health plans — Kaiser, Anthem Blue Cross, Blue Shield, PacifiCare and Health Net — since 2004.
Policy rescissions differ from cancellations. When a policy is rescinded, the plan has no obligation to pay current claims, leaving patients with potentially devastating medical bills for care already given. Cancellations are more likely to occur after claims are paid, she said.
The department’s action drew immediate, if cautious, praise from consumer groups that had been pushing state regulators to enforce existing laws that protect health plan enrollees.
Ehnes’ order last month to reinstate 26 enrollees — issued to Kaiser Permanente, Blue Cross and Blue Shield — followed an investigation into practices of health plans offering individual health insurance coverage. Of 28 million insured Californians, about 2.6 million have individual policies.
