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February 14, 2008

Heat is on California Health Insurers

With medical costs rising, record numbers of people losing their coverage and healthcare at the top of the domestic agenda, health insurers found themselves Wednesday in the cross-hairs of regulators, elected officials and law enforcement in California and across the nation.

New York Atty. Gen. Andrew Cuomo said the nation's largest health insurers have rigged rates they pay for physician visits, leaving patients with higher medical bills.

In Los Angeles, City Atty. Rocky Delgadillo has assembled a team of investigators and prosecutors to probe industry practices such as canceling patients' coverage after they get sick. Today he is set to unveil a first-of-its-kind website to solicit information about insurance cancellations and delays and denials of treatment.

The announcements follow a yearlong string of fines and citations against insurers in California. Just last month, amid widening state probes, state Insurance Commissioner Steve Poizner decided to seek as much as $1.3 billion in penalties from Cypress-based PacifiCare as a result of widespread claim problems.

"Our healthcare system is broken, and it's going to take a team effort to fix it," Delgadillo said. "Through our combined efforts, and the efforts of other prosecutors throughout this nation, we can make a real difference in stamping out fraud and abuse, and secure for American consumers the protection they deserve."

The crackdown echoes the frustration of consumers who revolted in the early 1990s against new health maintenance organizations, many of which sought to cut costs by rigidly regulating patients' freedom to choose doctors and limiting the medical care they would cover.

Insurers defend their business practices, saying one of their top goals is to keep health insurance affordable for all. In fact, they say, many of the practices in the spotlight actually are good examples of their value in holding down healthcare costs.

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Posted by healthinsurance at February 14, 2008 08:18 PM