Health Plans Back Third-Party Review for Policy Cancellations
Health plans in California are lobbying for legislation that would establish independent panels to review individual health insurance policy cancellations and protect health plans from future lawsuits, the Los Angeles Daily Journal reports.
Health plans have proposed a third-party review system for cancellations that is based on the process used to review disputes over medical services that health plans deny.
Under that system in California, the departments of Managed Health Care and Insurance contract with Maximus -- a for-profit company -- to review the cases and determine whether the denials were appropriate.
Lynne Randolph, a DMHC spokesperson, said state regulators believe a similar system could be effective for policy cancellations.
Unlike review panels for denied services, review panels for policy cancellations would include health care lawyers, as well as physicians.
America's Health Insurance Plans, an insurance industry group, is working on a proposal for legislation on third-party reviews for policy cancellations, and Mohit Ghose, senior vice president for AHIP, said the group is seeking to include important provisions of the proposal in legislation under consideration in California and other states.
Attorneys and health care advocates maintain that the proposal would create a system that favors the insurance industry.
According to the Daily Journal, elements of the AHIP proposal that have drawn the most resistance would:
- Require a third-party review before a lawsuit could be filed;
- Limit instances under which litigation could be brought; and
- Bar punitive damages in some cases (George, Los Angeles Daily Journal, 3/18).