Health Net Says Dispute With Trial Lawyer Group Should Be Decided by DMHC

Attorneys for Health Net of California on Wednesday said the Department of Managed Health Care should address a dispute with the San Francisco Trial Lawyers Association rather than the courts, the Contra Costa Times reports (Silber, Contra Costa Times, 10/27).

The dispute involves the Thousand Oaks-based health insurer's plan to terminate health policies for the association, among other groups. Health Net maintains that the associations do not have at least 1,000 members, the legal threshold required for insurers to renew coverage for professional organizations (California Healthline, 10/11).

William Taylor, an attorney for Health Net, said DMHC should decide the case because the insurer was violating its license issued by the agency when it offered coverage to the association for five years.

Terrence Coleman, an attorney for the lawyers' association, said the case is a contract dispute because Health Net broke its contract when it tried to cancel coverage. He added that the insurer misinterpreted a letter from DMHC stating that Health Net was correct in deciding that the association did not meet criteria of a small business association because the letter did not state that the health plan violated law by initially offering coverage (Contra Costa Times, 10/27).

The lawyers' association, which has 500 to 600 members, won a preliminary injunction in 2003 in a case that required Health Net to continue coverage (California Healthline, 10/11).