California Insurance Lawyer Blog

A recent Wall Street Journal article tells the story of our client Celina Whinery, who is suing Life Insurance Company of North America (LINA), a unit of Cigna, after the insurer refused to pay benefits the policy promised upon her husband’s death because he died in a one-car accident while legally intoxicated.

LINA argues that an insured who is legally intoxicated at the time of death is not entitled to benefits -- even though the policy does not exclude intoxication. Even though the policy language does not support LINA's argument, the insurer is forcing beneficiaries around the country to sue for benefits, and then appealing the cases it loses, which is most of them.

LINA knows how to exclude drunk driving from a claim for accidental death. It has a policy form that does exactly that. Those policies are less expensive however, since benefits are further limited. Instead, LINA sold a policy to CitiGroup (Mr. Whinery’s employer) in which it charged CitiGroup more money for a policy that did not exclude drunk driving. When Ms. Whinery made a claim on the policy (asking LINA to make good on their promise to pay), LINA denied the claim saying death due to drunk driving is not an accident and thus not covered. So, LINA makes more money by charging CitiGroup for the more expensive policy, but administers and denies claims as though they are dealing with the less expensive policies that expressly contain the exclusion.

LINA told Ms. Whinery that the policy defined accident. It didn’t. Moreover, the definition of accident LINA says was in the policy is not the definition of accident that the Appellate Court ruled applies in this type of case.

To make matters worse, LINA has an internal “authoritative” claims manual instructing that in cases of drunk driving, if there is no “intoxication exclusion” that claim must be paid.

So why is LINA forcing Ms. Whinery to sue for benefits? Mainly because federal law gives carriers of employer-based insurance the “discretion” to decide which claims they will – or will not – pay, as long as the decision is not "arbitrary or capricious."

Thankfully, California, enacted a law this year that now bans the enforcement of so-called "discretionary clauses" in insurance contracts (Insurance Code section 10110.6). Going forward, insurers will have to persuade the courts that their denials are supported by credible evidence. The law might not help Ms. Whinery, who told the Wall Street Journal, “Emotionally, you are going through a lot of things, and then to add this [unfair denial] on top, it makes it even worse.”

Kantor & Kantor partners Glenn Kantor and Corinne Chandler will present a National Business Institute teleconference “Troubleshooting Long Term Care Insurance Claims,” Thursday, January 26, 2012, at 10:00 a.m. Pacific time. The presentation, designed for a national audience of lawyers seeking to expand their knowledge about claims-handling practices and litigation strategies, provides up to two hours of continuing education credit. Topics the program covers include an overview of the state of the long-term care insurance industry, how to analyze common long-term claims and benefits denials, and creative litigation tactics.

For more information, or to register, follow this link: http://www.nbi-sems.com/SemTeleDetails.aspx/R-58789ER%7C?ctname=SPKEM.

The National Business Institute is one of the nation’s largest providers of legal and professional education, serving over two million professionals.

Kantor & Kantor is one of the largest law firms in the country exclusively representing plaintiffs who have been denied insurance benefits from life, health disability and long-term care policies. The firm has extensive experience with the complex appeals process and federal court litigation of ERISA matters. For more information, call (800) 446-7529.

PRESS RELEASE:

LOS ANGELES, October 31, 2011 -- Kantor & Kantor, LLP announced today that lawyers Alan Kassan and Corinne Chandler are presenters at the 21st Annual Western Region Chapter of the National Association of Professional Geriatric Care Managers held at the Bellagio Hotel in Las Vegas November 3-5. The session, “Obtaining Insurance Benefits for Your Client’s Care,” is scheduled for Friday, November 4, at 2:15.

“Many people purchased long-term care insurance decades ago and before many of today’s senior care options were even contemplated,” said Mr. Kassan, a Kantor & Kantor partner who sues insurance companies on behalf of individuals denied long-term care. “As a result, since most many present care options are not enumerated in polices, and insureds have to appeal or litigate to ensure benefits for the most appropriate long-term care. Part of what we do is educate professionals in the geriatric care industry about how to understand insurance policy language and to help their clients with the legal process.”

A common reason LTC carriers deny benefits is because the policyholder resides in an assisted living facility but the 20-year-old policy doesn’t cover such facilities, which were not an option until recent years. Kantor & Kantor has successfully litigated the issue, allowing policyholders to receive benefits for assisted living.

“As the Baby Boomer population ages and requires care, we expect more options to arise for which insurers will deny coverage,” said partner Corinne Chandler. “When geriatric care professionals understand that insurance companies don’t always have the last word, they can better help their clients navigate the often complex long-term care legal environment."

About Kantor & Kantor, LLP
Kantor & Kantor is one of the largest law firms in the country exclusively representing plaintiffs who have been denied insurance benefits from life, health, disability and long-term care policies. The firm has extensive experience with the complex appeals process and federal court litigation of ERISA matters. For more information, log on to www.kantorlaw.net, call (800) 446-7529, or follow the firm at www.californiainsurancelawyerblog.com.

Kantor & Kantor is pleased to announce that Governor Jerry Brown has signed into law S.B. 621. California State Senator Ron Calderon first proposed the legislation, which regulates life and disability insurance policies, and bans discretionary clauses in such. Previously, insurers included such clauses in group insurance policies and certificate, granting themselves the power to interpret terms of the policies, and to make eligibility determinations based on their own interpretations. This law provides that if a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life or disability insurance coverage for any California resident contains a provision that reserves discretionary authority to the insurer, or an agent of the insurer, to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards of interpretation or review that are inconsistent with the laws of California, that provision would be void and unenforceable.

The law authorizes the Insurance Commissioner to adopt regulations reasonably necessary to implement these provisions.

This law will change how federal Judges consider insurance cases going forward. Previously, in the event a disabled person filed a lawsuit against an insurance company that had included a discretionary clause in its policy, the federal Judge reviewing the case would be required to defer to the insurer’s decision, rather than look at the evidence for and against disability, and weigh it accordingly. In essence, the Judge would have to assume the insurer was correct in denying a claim, unless the plaintiff could prove that the insurer’s decision was arbitrary, unreasonable, capricious or clearly wrong. The scales were tilted, in favor of the insurers, who had self-granted discretion. Now, the scales will be level again.

ERISA (which stands for the Employee Retirement and Income Security Act) was a federal law passed in 1974 which governs, among other things, employee benefits. This law governs cases brought by, for example, disabled employees who are seeking their employer-provided disability insurance benefits, which have been denied. Because these employer-provided benefits fall under the governance of the federal ERISA law, any lawsuits for such benefits must be filed in federal court. The ERISA statute only applies to life and disability insurance policies, NOT health insurance policies. Hopefully, the law will soon be expanded to encompass health coverage.

Glenn Kantor was instrumental in assisting in the passage of this bill. He provided expert testimony in California state legislative hearings in Sacramento, and continues to fight for his clients whose policies may or may not contain such discretionary provisions.

For more details you can visit Senator Calderon's site: http://dist30.casen.govoffice.com

The International Association of Eating Disorder Professionals will stream an encore of Kantor & Kantor partner Lisa Kantor’s 2011 symposium presentation How to Document Evidence Based Treatment to Maximize Insurance Reimbursement, followed by a live teleconference call with Ms. Kantor Tuesday, Sept 27, 200, at 7 pm ET/6 pm CT/5 pm MT/4 pm PT. The presentation reviews insurance carrier criteria for treatment of eating disorders and explains how evidence-based treatment records can be documented to best maximize the client's available insurance benefits.

“A provider's treatment records are the foundation for establishing medically necessity for admission and continued treatment,” says Ms. Kantor, who has been recognized as one of the top lawyers in the country representing policyholders denied benefits for treatment of eating disorders. “Evidence-based treatment records must show plans of care, symptoms, and objective evidence that satisfy an insurance company's criteria for admission and continued care.”

Although only IAEDP members may participate in the live session, nonmembers and others unable to attend may submit questions about insurance benefits for eating disorder treatment to Rachel Teicher at rteicher@kantorlaw.net before, during and after the live session.

IAEDP members may register for the call by following this link: http://myaccount.maestroconference.com/conference/register/XVQ38AL38L6GVOVQ.

The 90-minute presentation is available for preview through this link: http://player.netromedia.com/?ID=5a57395a-560a-4073-9562-13acf1b7f32c&path=/IAEDPKantor%20in%20wmv.wmv.

Additional materials may be downloaded here: http://www.kantorlaw.net/Areas_of_Practice/Eating_Disorders/2011_IAEDP_Materials.aspx.

Thanks to the excellent efforts of attorneys Lisa Kantor and Elizabeth Green of Kantor & Kantor, LLP, the Ninth Circuit Court of Appeal issued an important decision on August 26, 2011 favoring policyholders in California. The question before the court was whether or not Blue Shield was required to pay for plaintiff's care at a residential treatment facility. The court held that although, technically, the terms of Jeanene Harlick's health insurance policy with Blue Shield did not require coverage, the California Mental Health Parity Act absolutely did require Blue Shield to pay for treatment. Ms. Harlick has suffered from anorexia nervosa for more than 20 years. In 2006 and 2007 she spent time at a residential treatment facility in an effort to help her cope with her eating disorder. Blue Shield refused to pay the substantial cost for that treatment.

The Ninth Circuit Court of Appeal’s opinion in Harlick is a major victory for all of those who are insured by Blue Shield of California and who suffer from eating disorders A stay in a residential facility that provides 24-hour supervision can be a crucial part of the successful treatment of an eating disorder. Almost all insurance companies that provide behavioral health benefits provide coverage for residential treatment. Blue Shield is one of the few insurers who exclude such treatment, while providing coverage for all other levels of care. The California Mental Health Parity Act requires insurance companies to provide coverage for the treatment of “severe mental illnesses,” including anorexia and bulimia, on the same terms and conditions as it does for physical illnesses. In its decision today, the Court held that the Mental Health Parity Act requires an insurer to provide all medically necessary treatment for eating disorders, including residential treatment, even if the insurance plan has an exclusion for that treatment.

The full text of the decision can be read by clicking here:

HARLICK v. BLUE SHIELD OF CALIFORNIA

The National Eating Disorders Association (NEDA) commends General Mills for pulling a controversial television commercial for Yoplait yogurt off the air after NEDA voiced concerns that the commercial may encourage disordered eating behaviors.

The commercial shows a thin woman agonizing over the decision of whether or not to eat a piece of raspberry cheesecake. Her internal dialogue shows her rationalizing the choice to eat a slice if she only ate celery sticks for dinner or if she jogged in place while eating it. This is typical of the type of bargaining and rationalizing about food choices conducted by sufferers of eating disorders every time they are confronted with a choice about food. When Lynn Grefe, president and CEO of NEDA and her colleagues first saw the commercial, what they saw wasn’t a woman making a healthy food choice, but one who was caught up in a compensatory exchange about food, Grefe said. “This felt like a 20 second look at the mind of somebody with an eating disorder.”

General Mills responded to the concerns by immediately taking the commercial off the air. Tom Forsythe, vice president of corporate communications for General Mills said, “[A]ny correlation was certainly unintentional. But if even a few people could take from the ad that mis-impression, then the right thing to do was to pull the ad—and we have.” In a public statement, Grefe thanked Yoplait and General Mills for addressing their concerns so quickly and stated, “I believe the company had no intent to harm and gained insight into a very serious issue that we hope will influence their marketing decisions in the future.”

To view the entire commercial and further commentary, go to:
http://shine.yahoo.com/channel/health/does-this-commercial-encourage-eating-disorders-video-2497971/
National Eating Disorder Association (NEDA) website: www.nationaleatingdisorders.org

After years of uncertainty, an important legal question was finally resolved by the United States Court of Appeals for the Ninth Circuit in an opinion, Cyr v. Reliance Standard Life, issued today, June 22, 2011.

Sitting en banc, the Court considered whether or not an insurance company, acting as the administrator for an ERISA group disability plan, could be sued in its own name as a defendant in a lawsuit for benefits. For years, insurance companies have been arguing that they are not proper party defendants. The companies have successfully been forcing plan beneficiaries to try and track down plan administrators -- who are sometimes difficult to find, or expensive to serve -- in order to timely and properly file a lawsuit. Suing a plan administrator of an insured plan is nothing more than a charade, as it is the insurance companies who usually have final say about whether benefits will be paid. Because of a loophole in the law, insurers were able to frustrate plan participants who wanted to sue for benefits but who were not able to identify and/or properly serve the plan administrator. That game is now over.

Writing for the Court, Chief Judge Alex Kozinski said "[w]e conclude, therefore, that potential liability under 29 U.S.C. § 1132(a)(1)(B) is not limited to a benefits plan or the plan administrator." The Court went further and overruled previous authority which has been used for years by insurance companies to thwart plaintiffs: "Any statements or suggestions to the contrary in our prior decisions, including Ford v. MCI Communications Corp. Health & Welfare Plan, 399 F.3d 1076, 1081 (9th Cir. 2005); Everhart v. Allmerica Financial Life Insurance Co., 275 F.3d 751, 756 (9th Cir. 2001); Spain v. Aetna Life Insurance Co., 13 F.3d 310, 312 (9th Cir. 1993); and Gelardi v. Pertec Computer Corp., 761 F.2d 1323 (9th Cir. 1985), are overruled."

The Court's full decision can be read by clicking this link: http://www.ca9.uscourts.gov/datastore/opinions/2011/06/22/07-56869.pdf

On May 11, Lisa Kantor argued before the 9th U.S. Circuit Court of Appeals in San Francisco, on behalf of client Jeanene Harlick, who has suffered from anorexia for more than 20 years. Ms. Harlick entered a residential treatment facility on the advice of her doctor. After initially approving coverage for the treatment, Ms. Harlick’s insurer Blue Shield denied coverage after only 10 days, even though the insurer agreed that such treatment was medically necessary.
Ms. Kantor contends that Blue Shield abused its discretion in denying coverage and that its actions violate California’s Mental Health Parity Act, which mandates that health plans provide the same coverage for severe mental illness as they provide for physical disease. In Harlick’s case, Blue Shield covers sub-acute treatment for physical conditions at skilled nursing facilities. At the same time, Blue Shield denies responsibility for the cost of sub-acute treatment for severe mental illness at residential treatment facilities.

“For the act to have any real meaning,” argues Ms. Kantor, “Blue Shield must provide the same levels of health services for severe mental illness as it does for physical illness. Otherwise the purpose and plain language of the statute is violated, and the discrimination against those with severe mental illness, which the statute was designed to correct, will be allowed to continue.”
Ms. Kantor is among only a few lawyers in the country who include as part of their practices representation of people with eating disorders who have been denied benefits for residential treatment. The fight has occupied two fronts: while regularly scoffing at both state and federal mental health laws to deny coverage, some insurers – including Blue Shield – rewrote policies effective Jan. 1, 2011, to specifically deny benefits for the 24-hour supervised care many people with eating disorders require for recovery. Instead, these insurers only pay for 9-hour day treatment outside of residential facilities. This new policy has already begun to erode the gains made by many people who have fought to have residential treatment care paid for by their insurance companies.

The International Association of Eating Disorder Professionals filed an amicus brief in support of Ms. Harlick and the contention that California Mental Health Parity Law applies to her case, Harlick v. Blue Shield of California, 10-15595. You can listen to the oral argument before the court by clicking here: http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007519

For more information about Lisa Kantor and legal assistance for eating disorders, follow this link: http://www.kantorlaw.net/Areas_of_Practice/Eating_Disorders.aspx.

It’s time healthcare premiums are regulated by the state, writes Los Angeles Times columnist George Skelton, referring to AB52, legislation proposed by Insurance Commissioner Dave Jones and Assemblyman Mike Feuer that would require insurers to obtain regulatory approval before hiking health insurance rates. Health care cost rose 3.4 percent last year while proposed premium increases in California were up to 39 percent, notes Skelton. See “A Case for State Regulation,” http://www.latimes.com/news/local/la-me-cap-insurance-20110502,0,3407855.column

The idea that California’s Department of Insurance should regulate health insurance premiums the same way it regulates auto and homeowner policies isn’t new. In fact, similar legislation sponsored by Jones last year when he was in the Assembly almost made it to the governor’s desk. Now, increased regulation is receiving renewed attention as insurers such as Anthem Blue Cross proceed with rate hikes that agencies such as the state’s Department of Managed Health Care determined are unreasonable.

Sate and federal officials up to and including President Obama can continue to denounce premium increases to no avail. Insurers aren’t listening. We agree with Skelton that it is time for the California Legislature to pass AB52.

The New York Times reported this week on a new study that confirms that “Chemo brain” is s a lingering cognitive side effect of cancer chemotherapy treatment. What is often brushed off by physicians as symptoms of normal aging or attributed to fatigue from illness, is now recognized as a pronounced and long lasting cognitive impairment. This foggy thinking, forgetfulness, difficulty finding words, and changes in memory, motor skills, and dexterity can be attributed not only to the compromises that the body’s cells have experienced from cancer, but also the body’s reaction from treatment.

The study found that recovery from cancer is not a simple fix. It takes time and patience, and the effects of treatment can linger for the duration of five years or more, depending on the individual. Cancer survivors must be mindful of these circumstances when attempting to return to their regular activities or work responsibilities. With memory, information processing, multi-tasking, and executive function skills impaired, recovering cancer patients may not be able to perform job responsibilities at the same functional level as before treatment.

Kantor & Kantor has been successful in obtaining disability benefits for clients suffering from “chemo brain” who were not cognitively capable of returning to work.

You can read the NY Times article here: http://well.blogs.nytimes.com/2011/05/04/chemo-brain-may-last-5-years-or-more/?ref=health

From 2009, to 2010, United Healthcare cut in half the compensation of its Chief Operating Officer, Stephen J. Hemsley. At first blush, it would appear United Healthcare is recognizing the ballooning costs to consumers of healthcare, and it acting responsibly. First looks can be deceiving. See http://blogs.courant.com/connecticut_insurance/2011/04/unitedhealth-ceos-pay-dropped.html

In 2009, Hemsley received $102 million in total compensation from United Healthcare. In 2010, his pay was cut in half, but even after a 50% reduction, he still received an exorbitant $48.8 million dollars in compensation. The majority of this pay was in the form of stocks and stock options ($ 44 million), in addition to the $4.8 million in he was paid in salary, incentive pay, and other compensation. Putting his compensation into perspective, his 2010 compensation is equal to the sum total of the average annual household income of 2,000 American households. It would also be enough to pay a $500 monthly health insurance premium for 8,500 families. See http://www.moneytalksnews.com/2010/04/17/insurance-outrage-hike-prices-pay-ceo-100000000/

How can United Healthcare justify its continued premium increases, based on rising healthcare costs, while at the same time paying its Chief Executive $48,800,000? Shouldn’t the Board of Directors of United Healthcare be more concerned with its policyholders’ ability to access and receive quality care rather than compensating its officers in such an outrageous manner?
Andrew Goldstein of corporate compensation adviser Towers Watson says, “We all kind of scratch our heads when executives are making millions, and (corporate) directors feel obligated to give them $10,000 for financial planning, It’s not like directors haven’t thought about getting rid of perks. They’re still a sticking point for a lot of executives. They feel it’s part of their compensation package. And it’s a stature thing.” So it seems that despite these tremendous salaries, CEO’s continue to cling to these perks at the health expense and financial burden of those less fortunate. Simply because directors feel obligated, and executives feel entitled. See http://www.usatoday.com/money/companies/management/2011-04-11-CEO-perks.htm

While families struggle to afford the soaring increases in insurance rates and battle the stresses of paying for prescriptions, doctor visits, and various health issues, United Healthcare remains “America’s largest commercial health insurer based upon revenue”, seemingly profiting from our medical woes. If it wasn’t so sad, and if so many Americans were not suffering from the consequences of being uninsured, classifying compensation of $49 million dollars as “pay cut,” would be comical. Perhaps the various departments of insurance, and our legislature, should look a lot more closely at insurance executive compensation when considering how to regulate insurance costs and fix our insurance crises.

The New York Times reported this morning on a very disturbing trend. It seems various states are relaxing their laws which require insurance companies to maintain adequate reserves to pay claims, and to keep their finances transparent to the public. Why in the world would state governments do such a thing? Well, it seems there is money to be made in the form of taxing these insurance entitles...a lot of money. So, "shady" business that was mainly being conducted offshore in countries like Bermuda or the Cayman Islands, is now permissible in states like Vermont, Utah, South Carolina, Delaware and Hawaii. Those states are "aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. Roughly 30 states have passed some type of law to allow companies to set up special insurance subsidiaries called captives, which can conduct Bermuda-style financial wizardry right in a policyholder’s own backyard."

Aetna, MetLife, the Hartford Financial Services Group, Swiss Reinsurance, Genworth Financial and the American International Group (A.I.G.), among others, taken advantage of these laws and the concept of "captives" in order to refinance life, disability and long-term-care insurance policies.

One of the major concerns of these financial maneuverings is that is that some states are offering a more lenient, and less protective scheme of laws than other states and thus lure companies away from the protective states. This game may allow insurance companies to escape some of the consumer protective rules that have been put in place over the course of many years, all to the detriment of insurance consumers.

Fortunately, our California Insurance Commissioner, Dave Jones, is taking a cautious and sensible approach to all of this as can be seen from his comments. Mr. Jones remarks “we need to ensure that innovative transactions are not a strategy to drain value away from policyholders only to provide short-term enrichment to shareholders and investment bankers.”

Read the original article. It's a bit scary. http://www.nytimes.com/2011/05/09/business/economy/09insure.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=tha2

On April 12, 2011, Kantor & Kantor partner, Lisa Kantor was one of five speakers in a Congressional Briefing in Washington D.C., entitled “Addressing Eating Disorders Through the Federal Response to Eliminate Eating Disorders Act.” This Briefing was sponsored by The Eating Disorders Coalition in cooperation with Senator Tom Harkin (D-IA).

The "FREED" Act is the first comprehensive eating disorders bill in the history of Congress that provides needed action for research, treatment, education and prevention of eating disorders. The Act recognizes that eating disorders are serious and life threatening, but that with adequate and appropriate treatment people do and can recover. That Act also requires research, education and prevention so that we can better understand, treat, prevent, diagnosis and intervene early with eating disorders patients.

Click here to read Ms. Kantor’s speech.

We recently obtained a Judgment against Anthem Blue Cross regarding its refusal to pay for 2 weeks of inpatient treatment for our client who struggled with an eating disorder. The client, a middle-aged woman, sought treatment for her anorexia nervosa at Pacific Shores Hospital, in Oxnard, California. Her health insurer, Anthem Blue Cross, agreed to pay for the first part of the doctor prescribed treatment, but then cut off benefits before the treatment program was complete. Anthem informed her of its denial on March 19, with a retroactive denial date of March 11. Since her doctors advised her to complete the program they had set for her, our client paid out of pocket for her last 2 weeks of treatment.

Our client successfully completed her stay at Pacific Shores Hospital and went home, equipped with strategies learned during her five-week-long treatment, to maintain a healthy body weight and image. She continues to be conscientious in her recovery and has returned to her active life and hobbies, including horse-back riding. Her case is an example of how focused treatment for eating disorders, uninterrupted by insurance claims denials, can be highly effective.

“Don’t take a health insurer’s rejection as the final word on your medical claim,” writes Tom Murphy of the Associated Press in a recent article about how to craft an appeal to an insurance company to re-evaluate a denial. See “Fighting an Insurance Claim Denial Can Pay Off,” http://www.philly.com/philly/business/personal_finance/20110405_ap_fightinganinsuranceclaimdenialcanpayoff.html?page=1&c=y.

Murphy cites a recent report from the Government Accountability Office that found – in some states – appeals have about a 50 percent success rate. The article lists a number of actions policyholders can take to provide relevant information that could prompt an insurer to change its mind. Those factors include obtaining and submitting copies of your entire medical file; enlisting your doctor to write letters explaining the need for medical care; understanding policy language and complying with all deadlines; and supplying medical literature and scientific studies that support the efficacy of the requested treatment.

That’s all good advice, but what the article fails to mention is the impact of federal law on the appeal. Any information not included in this appeal, which is mandatory before you can file a lawsuit against the insurance company for benefits, usually cannot be introduced in the subsequent lawsuit. Don't just assume you are right and that the insurance company will change their mind. As you can see, at least 50% of the time, they don't. You must be complete and thorough with what you include in the appeal, because you won’t get a second chance. So... do it right the first time.

If you plan to appeal an insurance denial, we can help. Call us at (800) 446-7529.

Most Californians do not know that unlike auto, property and casualty insurance, the Insurance Commissioner does not have the authority to reject excessive health insurance rate hikes. Since 1988, when California voters approved Proposition 103, the Insurance Commissioner has saved California consumers billions of dollars every year in excessive premiums on their auto, property, and casualty policies. Extending these protections to health insurance and managed care plans is long overdue. Assembly Bill 52 gives the Insurance Commissioner the authority to overrule excessive health insurance rate increases and gives the Department of Managed Health Care the authority to reject excessive HMO rate increases. This is one of the pieces missing from the federal health care reform legislation.

This critical piece of legislation is schedule to be heard during this legislative session. The Legislators need to hear from all Californians who are concerned about continually rising health insurance rates. Listed below are the Assemblymembers who sit on the Assembly Health Committee. Please call their office and let them know that the continually rising health insurance rate increases are unsustainable and that you support AB 52.

Assembly Health Committee members:

Bill Monning, Chair (D) -- (916) 319-2027
Dan Logue, Vice Chair (R) -- (916) 319-2003
Tom Ammiano (D) -- (916) 319-2013
Toni Atkins (D) -- (916) 319-2076
Susan Bonilla (D) -- (916) 319-2011
Mike Eng (D) -- (916) 319-2049
Martin Garrick (R) -- (916) 319-2074
Richard Gordon (D) -- (916) 319-2021
Mary Hayashi (D) -- (916) 319-2018
Roger Hernandez (D) -- (916) 319-2057
Bonnie Lowenthal (D) -- (916) 319-2054
Alan Mansoor (R) -- (916) 319-2068
Holly Mitchell (D) -- (916) 319-2047
Brian Nestande (R) -- (916) 319-2064
Richard Pan (D) -- (916) 319-2005
V. Manuel Perez (D) -- (916) 319-2080
Jim Silva (R) -- (916) 319-2067
Cameron Smyth (R) -- (916) 319-2038
Das Williams (D) -- (916) 319-2035

On April 12, Lisa Kantor will join other eating disorder activists in Washington, D.C. to lobby Congress to pass the FREED Act, H.R. 1193, the Federal Response to End Eating Disorders, a comprehensive bill that addresses eating disorder research, treatment, education and prevention. Ms. Kantor, a partner in Kantor & Kantor, will be part of a select group of panelists who will speak to a congressional committee about how U.S. institutions could change attitudes and perceptions to encourage and promote effective treatment of and recovery from eating disorders.

Most notable, Ms. Kantor will testify about insurance and health plan attempts to both construe and limit policy language in ways that deny coverage for treatment in specialized residential facilities. For example, in January some insurers completely eliminated residential treatment as a covered mental health benefit, despite clinical evidence demonstrating that residential treatment is a critical stage of comprehensive and effective treatment for many individuals suffering from eating disorders.

“This is an alarming trend that not only narrows treatment options for people suffering from eating disorders but also could put many facilities out of business,” says Ms. Kantor. “If these health insurers are successful in their attempts to undermine effective treatment for eating disorders, other health plans will follow their dubious leadership. That will life-threatening to many people seeking full recovery.”

Ms. Kantor is among only a few lawyers in the country advocating for insurer reimbursement for clients with eating disorders. She has a number of significant wins for these clients, including cases that have changed the law in California and the 9th Circuit. She is currently working with eating disorder professionals and facilities to determine what actions to take to change the insurance industry’s perception about care for eating disorders and what regulatory, legislative and class action litigation measures are necessary. Ms. Kantor has been a keynote speaker for the International Association of Eating Disorder Professionals and frequently speaks to other groups about health insurance issues and eating disorders. For more information, call (800) 446-7529 or contact Ms. Kantor at lkantor@kantorlaw.net.

For more information about the FREED Act, go to http://www.eatingdisorderscoalition.org/documents/summaryofFREEDAct.pdf.

Wall Street Journal writer Avery Johnson reported recently that defining “essential benefits” is the latest insurer roadblock in implementing the federal health reform legislation. See “Defining Essential Care.”

The debate revolves around the difference between rehabilitative services, relearning skills lost through disease or injury, versus “habilitative” services, the process of acquiring new skills. Insurers tend to label habilitative skills educational or experimental, thus falling outside of coverage.

Health law divides essential services into 10 categories, each containing treatments that could fall within either rehabilitative or habilitative services, depending on how the debate is decided. Insurers want to keep the habilitative services categories as broad as possible so they have flexibility in designing benefits packages, writes Johnson.

Medical professionals believe if coverage specifics for these treatments are not spelled out in detail, insurers have more leeway to delay and deny benefits. Allowing insurers to determine habilitative services is problematic as well, particularly since the determination will likely fall along financial, rather than medical, lines.

Under the mental health and substance-abuse disorders category, the debate concerns the length of stay in a treatment facility. Other treatments under question include unlimited physical therapy and nutrition counseling.

Arguing about how long a patient may stay in a residential facility is nothing new. Health plans must be salivating over the option to have the power to draw a bright line to determine an appropriate length of stay in a treatment facility or to decide when rehabilitation turns into habilitation. But since each individual is different, those diagnoses must remain in the hands of skilled medical professionals.

Especially troubling to us is the impact this debate could have on treatment for eating disorders. In many states, eating disorder treatment is covered as a mental health condition. To save money, employers are beginning to drop mental health coverage as part of their health plans. Some plans have implemented new rules this year that deny coverage benefits for residential treatment of eating disorders. Even something as simple of denying benefits for nutrition counseling could be a life-or-death decision for some patients.

Rulemakers must also realize that decisions made in the context of plans sold on insurance exchanges could also inform how insurers will interpret employer-provided plans. The erosion of coverage for mental health issues is alarming. Regulators need to ensure this trend doesn’t weaken the protection the federal government plans to endorse.

We continue to see evidence in insurance company claim files that insurers are not only conducting traditional surveillance, following their insureds/our clients around, but the insurers are using the internet to snoop around and learn as much as they can about claimants, their activities, their family members, etc.

We know the insurance companies do this to protect against fraud, and there is nothing wrong with that. But, all too often, the insurers get a bit overzealous, and even intrusive in their conduct, and they start to treat everyone like a criminal of some sort.

Perhaps the most shocking example of this activity we’re aware of, is a case of one major insurer accessing private files off of a claimant’s computer. It appears that the insurer may have actually hacked into its insured’s private computer to obtain information related to internet activities, e-bay purchases, YouTube viewing history and private files.

Such activity is, of course, illegal, and may give rise to, among other things, an invasion of privacy cause of action. We continue to remind our clients and anyone with insurance who may or may not ever make an insurance claim: do not take internet privacy for granted. While it is one thing for an insurance company or any other entity or individual to illegally access your private information, it IS legal for anyone to track your internet activities you put in the public sphere of cyberspace. Be mindful that what you post, blog about, advertise, or share on social networking sites, message boards, in online fora, etc. is fair game. Moreover, the reality is often that the picture one portrays of him or her self in cyberspace, may not be a complete picture of that person's life. Unfortunately, when it comes to insurance claims, and particularly ERISA claims, such a picture may be the only one a court sees. Be mindful.