Kaiser Permanente ordered to reinstate benefits it illegally canceled

The California Department of Managed Health Care on Wednesday ordered Kaiser Permanente to reinstate coverage for an individual policyholder because the insurer's cancellation of the coverage was illegal, the Los Angeles Times reports.

The case involves a woman who purchased individual coverage from Kaiser, after being covered by the HMO for more than 20 years through her employer and COBRA.

Kaiser canceled her individual health plan four months after she applied, saying that she omitted information about an appointment with a Kaiser doctor regarding neck and arm pain.

The HMO threatened to report the woman to law enforcement for fraud and billed her $13,000 for treatment she had received.

Amy Dobberteen, assistant deputy director of DMHC, in the order said, "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," adding, "Not only did a Kaiser physician treat her ... but Kaiser also filled and paid for her pain medication."

The department found that Kaiser did not prove the woman "willfully misrepresented her health history."

The decision marks the first time that the state has ordered an insurer to reinstate coverage (Girion, Los Angeles Times, 10/19).

Please note: The Kaiser Family Foundation is not associated with Kaiser Permanente or Kaiser Industries.