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May 15, 2008

Kaiser agrees to offer coverage to 1,000 canceled patients

Kaiser Permanente has agreed to offer insurance to 1,092 individuals whose policies were inappropriately canceled after they got sick and to refund money paid to the health plan for medical care.

The health plan has also agreed to provide a fair and speedy process to resolve any additional expenses incurred due to a gap in coverage, Kaiser officials and state regulators announced Thursday.

Kaiser is the first of five large California health plans to reach settlement with the state Department of Managed Health Care over the controversial practice of rescinding individual insurance coverage after patients got sick, claiming they had pre-existing conditions and did not qualify for coverage.

The agreement includes a $300,000 fine against the health plan and a potential fine of $3 million if Kaiser fails to pass a survey of its practices by state regulators within the next 18 months.

An agreement with Health Net Inc. is pending. It will cover 85 individuals who had their policies canceled since 2004, said agency director Cindy Ehnes. Her department is in discussions with the other three plans: Anthem Blue Cross, PacifiCare and Blue Shield of California.

"Kaiser is the first to step up," Ehnes said in a press call Thursday. The $300,000 fine and potential $3 million penalty are unique to Kaiser, she said. Other settlements will reflect the circumstances at other health plans.

Jerry Fleming, national health plan manager for Kaiser, dubbed the deal as a "fresh-start" program that will immediately provide coverage for individual members whose policies were rescinded with no medical questions asked.

Kaiser voluntarily halted the controversial practice, known as "rescission," in October 2006 after questions were raised about the application survey used.

On April 17, Ehnes ordered the five health care plans to immediately reinstate coverage for 26 people whose insurance benefits were wrongly canceled after they filed claims -- and ordered a review of thousands of additional cases.

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Posted by healthinsurance at May 15, 2008 02:10 PM

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