Four months after the switch, the HMO dumped her. Kaiser claimed she omitted information about her health from the application the HMO required her to fill out when it sold her the individual plan. Kaiser also threatened to report her to law enforcement for fraud and billed her for $13,000 worth of treatment.
The problem, regulators concluded, was that Kaiser faulted the woman for not disclosing an appointment she had for arm and neck pain with a Kaiser physician. "The enrollee had no reason to believe that Kaiser was not on notice of her arm and neck pain at the time she filled out her Personal Advantage application," Amy Dobberteen, assistant deputy director of the state agency, said in the order. "Not only did a Kaiser physician treat her ... but Kaiser also filled and paid for her pain medication."
The agency ruled the rescission illegal because Kaiser made no showing that the woman "willfully misrepresented her health history."
It also said the cancellation was particularly egregious because the woman, whose name was not disclosed, couldn't afford to pay for medical treatment on her own and needed the expertise of Kaiser doctors who had treated her before.
"She fears she will be forced to go to an emergency room because she is no longer able to see the Kaiser urologists who treated her for this condition for the 20 years she had healthcare coverage with Kaiser," Dobberteen said in the order.
Kaiser, along with other insurers, believes that it can revoke coverage for any omission or misstatement in an application that would have led the insurer to decline coverage initially. And, they say, revocation is a necessary weapon against fraud.
But regulators and consumer lawyers disagree. In their view, California law prohibits insurers from revoking coverage for innocent mistakes.
Kaiser spokesman Jim Anderson said the HMO was already engaged in arbitration with the woman when regulators got involved. But their involvement speeded up the process.
"As soon as we learned that there was some medical urgency, we started looking for ways to move the process more quickly," he said.
The woman got back into treatment last week -- more than a week after the Department of Managed Health Care first directed Kaiser to reinstate her and two years after her coverage was revoked.
