An arbitrator called HealthNet’s practices “despicable” after awarding $9 million to a cancer patient who whose medical coverage was canceled by the company after she was diagnosed with breast cancer.

The award issued by an arbitration judge was the first of its kind and prompted Health Net to announce it was scrapping its cancellation practices that are under fire from state regulators, patients and the Los Angeles city attorney.

Arbitrator Sam Cianchetti, a retired Los Angeles County Superior Court judge, found that Health Net violated numerous state laws in canceling Patsy Bates’ policy and declared the company’s actions “despicable.”

Cianchetti also blasted the company for tying employee bonuses to the number of policies canceled and the amount of money saved.

“It’s difficult to imagine a policy more reprehensible than tying bonuses to encourage the rescission of health insurance that keeps the public well and alive,” he said in a 21-page opinion.

Ms. Bates is self-employed and transferred her coverage to HealthNet in order to get a better rate.

“Bates was contacted by Mr. Robert Torrez, who called regarding health insurance. When advised she already had health insurance, Torrez suggested he might be able to get her a better rate. An appointment was made,” reads the arbitration award.

The arbitrator found that HealthNet’s agent did not properly explain and review the forms Ms. Bates was required to sign and also changed her weight on the application without her written consent.

“When asked about her weight, she told him her weight on her driver’s license was 185lbs. She never told Torrez to change the weight, nor was she aware that the weight had been changed.”

After Ms. Bates was diagnosed with breast cancer, HealthNet rescinded her coverage because of the weight change and left her with over $100,000 in unpaid medical bills.

Health Net ordered to pay $9 million after canceling cancer patient’s policy [LATimes]
Arbitration Award (PDF) [LA Times]

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