News: 2009 Press Release
For Release: November 6, 2009
Media Calls Only: 916-492-3566
Superior Court Throws Out Insurance Company Lawsuit Against Commissioner Poizner
Judge Finds PacifiCare Life & Health Attempted to Mislead Him in Challenge to the Commissioner’s Enforcement Action
A Los Angeles Superior Court has thrown out a lawsuit by PacifiCare Life & Health Ins. Co. that attempted to derail Insurance Commissioner Steve Poizner's enforcement action charging PacifiCare with more than 100,000 violations of law in processing health-insurance claims.
"I am pleased that this distraction is over and the Department of Insurance can return to the serious business of enforcing the law," said Commissioner Poizner. "PacifiCare faces serious charges, brought after an unprecedented flood of complaints from doctors and consumers."
The Department of Insurance is seeking as much as $5,000 for each of the more than 100,000 claims handling violations, which can increase to $10,000 if the violations are found to be willful. PacifiCare's lawsuit challenged two longstanding regulations defining "willful" in a manner that PacifiCare claimed made it too easy to hit the insurer with a $10,000 penalty.
At a Sept. 3 hearing, Superior Court Judge James Chalfant issued a tentative decision granting Poizner's motion to dismiss the case and send the case back to an administrative law judge. However, PacifiCare's counsel made various representations to Chalfant at the Sept. 3 hearing that led him to deny Poizner's motion.
In a hearing today on Poizner's motion to reconsider the September ruling, the judge found that PacifiCare had misled him with claims that were "not true." He threw out the company's complaint.
PacifiCare's alleged violations cited include:
- Wrongful denials of covered claims
- Incorrect payment of claims
- Lost documents including certificates of creditable coverage and medical records
- Failure to timely acknowledge receipt of claims
- Multiple requests for documentation that was previously provided
- Failure to address all issues and respond timely to member appeals and provider disputes
- Failure to manage provider network contracts and resolve provider disputes
The administrative hearing begins on Dec. 7, 2009, before an administrative law judge at the Office of Administrative Hearings in Oakland. She will hear the evidence and propose a decision to Poizner, who makes the final decision.
"I look forward to hearing the company's defense to these charges and issuing a ruling that fairly judges the evidence and the law," said Commissioner Poizner.
The Department of Insurance first announced its action against PacifiCare in January 2008 and announced in June 2009 that the matter would be moving towards an administrative hearing.
To view the tentative decision, please select this link.
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