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Local News in Brief : Amerimed Sued Over Advertising Practices

Digest

March 05, 1986

A Burbank-based provider of health-care plans was prohibited Tuesday from using false or misleading advertising or solicitation to gain members.

The state commissioner of corporations, Franklin Tom, obtained a Los Angeles Superior Court order against Amerimed, doing business as Serra Medical Foundation.

The state's suit alleges that Amerimed falsely represented to prospective enrollees that state and county entities recommended or endorsed the plan, that those eligible for Medi-Cal could lose some or all of their benefits if they did not enroll and that enrollment would help curb fraud and abuse of Medi-Cal.

"It shouldn't happen to the elderly or others who might have difficulty with the language or understanding," said George A. Crawford, senior corporations counsel for the commission. "It is extremely important that any solicitation be open and aboveboard."

Amerimed sells memberships in a health-care plan offering medical care and services in six area hospitals, most of them in or near the San Fernando Valley.

The parties agreed to a stipulated judgment permanently enjoining Amerimed and its employees or representatives from any form of misrepresentation in selling memberships.

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