I'm late linking to this article in the L.A. Times but it's nevertheless worth noting. Earlier this month I blogged about revelations that Health Net in California tied performance bonuses to the number of health insurance policies at least one key employee rescinded. The week after that story broke the Department of Managed Health Care, the state agency responsible for regulating HMOs in California, fined Health Net $1,000,000. The fine was based solely on the fact that Health Net had received assurances from a "senior employee" at Health Net just a few weeks ago that the company did not link bonuses to the number of policies company employees rescinded. As it turns out, that assurance was false. In California it is illegal for HMOs and health insurers to tie compensation to how aggressively the company rescinds health insurance coverage. Health Net and a number of other HMOs remain under DMHC investigation for whether they have rescinded health insurance coverage without the proper investigation or factual basis to do so. Blue Cross of California has already been penalized for that practice. I have a feeling Health Net has not written its last penalty check to the DMHC relating to its rescission practices.
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