L.A. County Doctors, Patients Sue Health Net Over Denied Claims

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The Los Angeles County Medical Association and two patients have filed a lawsuit against Health Net, alleging that the insurer used "a defective utilization management process" to deny claims for medical procedures it deemed medically unnecessary, Modern Healthcare reports (Robeznieks, Modern Healthcare, 9/13).

Details of the Allegations

The lawsuit, which was filed in Los Angeles Superior Court, alleges that Health Net conducted unlawful business practices (Beasley, Reuters, 9/13).

According to the lawsuit, Health Net said that an emergency radical prostatectomy and a nerve stimulating device implant for two patients were not medically necessary. Both patients, plaintiffs in the case, underwent their respective procedures, which effectively treated their conditions, Modern Healthcare reports (Modern Healthcare, 9/13).

Rocky Delgadillo -- CEO of the Los Angeles County Medical Association -- said the insurer is "denying these treatments because they are expensive."

Delgadillo in a statement said, "By deciding which medical treatments are necessary and which ones it will cover, Health Net is dictating medical care from the boardroom." He added, "Patient care should be decided by doctors, not business suits."

Health Net's Response

Although Health Net did not comment directly on the lawsuit, the insurer denied any wrongdoing (Modern Healthcare, 9/13).

Health Net in a statement said, "Medical care is complex, and sometimes there are differing medical opinions as to what constitutes medically necessary care," adding, "In these instances, Health Net carefully follows the guidelines established by the state of California's two regulators, the Department of Managed Health Care and the Department of Insurance" (Reuters, 9/13).

Hatti Hamlin
It's unfortunate that insurance companies have generally painted themselves into a corner through their perceived anti-consumer behavior, so that when they try to exert reasonable control over costs, they can be made to appear the villain. Left entirely up to caregivers, at least some doctors and hospitals would seek to exploit the system by over-treatment and/or use of unnecessarily expensive alternatives. If insurors are not permitted to distinguish between appropriate care and over-treatment, how will we ever rein in costs? I understand the argument that insurors are [just] trying to make more money, but how are we to know that doctors and hospitals don't have exactly the same motivation? How can we exercise some reasonable restraint over a health care model that is clearly out of control??

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