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April 24, 2008

Insurance reinstatement orders put health plans on edge

Last week’s move by state regulators, opening the door to restoring health insurance to thousands of customers who had their coverage cancelled by health plans, has the health care world waiting to see what will happen next.

The plans say they are still waiting for word from the Department of Managed Health Care about which 26 customers have been ordered to have their health care coverage restored. Thousands of other cases will be reviewed by an arbiter, selected by the department.Representatives from various health plans said they expect the broader review of these cancellations to be challenged in court. Though none would speak for attribution, they said they are waiting to see the details of the process established by the department before commenting on any potential legal action.

The department ordered the reinstatement of 26 patients who had their health coverage cancelled by Blue Cross, Blue Shield and Kaiser. More reinstatements may be ordered as the department winds up its investigation of HealthNet and PacifiCare.

Blue Shield and Kaiser said the department made the public announcement before revealing to the plans which patients were being reinstated. It was unclear whether the plans would fight those specific reinstatements.

“We are in the process of contacting them,” said DMHC spokeswoman Lynne Randolph. She said the DMHC had contacted the health insurance plans for information on cases, and would issue the formal reinstatement orders shortly. “We should have it wrapped up by the end of the week,’” she said.

DMHC Director Cindy Ehnes said her office would review cancellations between 2004 and 2008. “Every single rescission will be reviewed by this department,” Ehnes said, adding that patients would be compensated for their costs in the event the rescission was flawed. “For the first time, we are giving people a second chance to get that health coverage,” she said.

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Posted by healthinsurance at April 24, 2008 02:38 PM

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