Canceled Cancer Patient Awarded $9 Million

(CBS/AP)  A woman who had her medical coverage canceled as she was undergoing treatment for breast cancer has been awarded more than $9 million in a case against one of California's largest health insurers.

Patsy Bates, 52, a hairdresser from Gardena, had been left with more than $129,000 in unpaid medical bills when Health Net Inc. canceled her policy in 2004.

Arbitration judge Sam Cianchetti ordered Health Net to repay that amount while providing $8.4 million in punitive damages and $750,000 for emotional distress.

"It's hard to imagine a situation more trying than the one Bates has had to endure," Cianchetti wrote in his findings. "The rug was pulled out from underneath, and that occurred at a time when she is diagnosed with breast cancer, one of the leading causes of death for women."

"I had cancer, my life was on the line, and these guys did not care, did not care at all," Bates told the CBS Evening News last November.

In fact, she was in the hospital getting prepped for surgery when she first learned Health Net was dropping her.

Some of the documents Health Net was forced to hand over revealed that senior analyst, Barbara Fowler, single-handedly dropped hundreds of policy holders like Bates from the rolls every year.

The shocker: the company awarded her bonuses based on how many policy holders she dropped.

The company called 2003 - the year Fowler dropped Patsy Bates - "a banner year" for her, for saving the company $6 million in what they call "unnecessary health care expenses."

"It has never affected how I performed my job duties," Fowler told CBS News, but Bates' attorney called that outrageous and illegal.

Bates, a mother of two, said she screamed when she heard about the damage award.

"I am elated," she said.

Bates' attorney William Shernoff said he wanted other insurers to take notice of the award.

"We are going to stop a put to this practice," he said.

Health Net said it was implementing a freeze on policy cancellations that would last until the company sets up a third-party review panel to scrutinize cases.

"Obviously we regret the way that this has turned out, but we are intent on fixing the processes to maintain the public trust," Health Net spokesman David Olson said.

Bates had previously been insured with another company but was persuaded to switch over to a Health Net policy after an agent suggested she could save money.

She said she had undergone surgery to remove the tumor and had received her first two chemotherapy treatments when doctors stopped treating her because her bills were going unpaid.

"I was devastated, I didn't know what was going to happen," Bates said. "It's boggling that someone can do that to you."

She went on to complete her cancer treatment through a state-funded program.

Health Net also said it would conduct a review of its practices and the way its brokers and agents are trained.

The award came a day after the Los Angeles city attorney sued Health Net, claiming it illegally canceled the coverage of about 1,600 patients. City Attorney Rocky Delgadillo also said the company illegally ran an incentive program in which it paid bonuses to an administrator for meeting targets of policy cancelations.

Health Net acknowledged that such a program existed in 2002 and 2003 but was subsequently scrapped.

In his findings, Cianchetti wrote that "it's hard to imagine a policy more reprehensible than tying bonuses to encourage the recision of health insurance that helps keep the public well and alive."

[democrat122]

Typical of the Private Insurance Industry. However, we should not overlook the fact that you and I (and all whose employers use this company) are going to pay this woman $9 million! On top of her medical bills and "emotional distress" money of 750,000! That''s $9.75 million (above her medical bills) for her coming out of my pocket. All for a case in which HER MEDICAL CARE WAS NOT AFFECTED - she received all the treatment she needed, and ON TIME. She better give all that money to cancer research, although it doesn''t sound like from the quotes in the story. What a messed up system - we should punish the company, repay the woman''s expenses and give the 9 mil to Cancer research, not to this person.

[Netterz]

Being a Cancer patient, have been on msg boards from all over the world and if the US is planning on mirroring the Canadian national health care, I want NO part of it. Women that have the same rare type of breast cancer that I have, called Triple Negative, are waiting atleast 6 months to even get into an Oncologists office. Mine is a very aggressive type. The secondary tumor in my lymph nodes grew to the size of a deck of cards overnight. If I would have had to wait that 6 months, I would be dead right now. I have seen many docs, in casual conversation with is considering leaving practice, due to extreme rise in there malpractice insurance policies, they can not afford. Frivolous lawsuits,the blame they take when an FDA approved med is bad & how a few BAD doctors make the rest have to pay more. Insurance Companies are *** everyone in America making BILLIONS each year. Big Pharmas & Insurance Co''s, as well as ambulance chasing Atty''s are the reason our health care system DOESNT WORK. If everyone wasnt so busy looking for there own personal slip & fall to get rich on, things would be alot better.

[Meg003]

b-easy63 makes a good point about the potential for the case to drag on.

Another consideration for this lady, unfortunately, is that she may actually wind up owing money. Under the Alternative Minimum Tax laws, attorneys'' fees awarded may be included in the litigants gross income.

[vitajay85]

Happy to hear this outcome and wish this lady well. And how dare these idiots do this to her...and I hope their wallets are hurting badly. Should get some $$$ out of the pockets of the CEO and his cronies...

[blawrence8]

How does that Lady fowler go to bed at night knowing she gets a bonus for dropping policies. She should go to jail. She should personally get fined and give the bonus back....she is an animal.

jvande7471: You wrote -"Now that she has been awarded $9 mil., Bates should donate a good amount of that money to said state-funded program to help out others in need."

I imagine the state has put a lean on any award money to recover their costs. This is standard practice.
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Who made you God and Financial Consultant. Anyway, who asked you? what she does or does not do with her money is her business and none of yours.

[tulcak]

b-easy, walter reed is an ARMY hospital. who''s the commander in chief? UHC eliminates the decision making by insurance companies or bureucrats and eliminates the profit we have to pay private companies. as a voter, i have a voice in how health care is run under the UHC system. right now, i don''t have a voice because insurance companies are powerful lobbyists. besides all that, health care for profit is immoral. its wrong. you care for people because you "care", not to make a profit.

[tulcak]

b-easy63, have you ever been insured by "socialized medicine"... by the way its called National Health care. i live in Europe now and I am experiencing the joys of nationalized health care. its absolutely wonderful and not expensive because we don''t have to pay the profit portion that those of you have to pay for in the privitized version. health care for profit is the sleaziest, most immoral thing. all the rest of the world has national health care because it works. i can''t believe with all the problems Americans are having with their system that there are those that still defend privitization. and the lies that people use to defend it. national health care works, privitization does not. it doesn''t work for health care, it doesn''t work for energy utilities and it doesn''t work for national infrastructure.

[duffyn]

Here''s the problem, simply. For the last 8 years, bush and pub lawmakers, senator, house of rep have NOT represented us the people. They have passed laws benefiting pharma companies, health insurance companies, banking and loan industry, oil companies. That is corporations. NO ONE was representing us! I believe this is now changing with the Democrats but I am not sure. One thing we need to do is outlaw lobbyists! It is rediculous when you think of all the money these congress people get from health insurance companies, on and on while they are supposedly representing us. People of America, workers, anyone, get out and use your vote power to change the situation 8 years of bush and company has given us.

[macktruck194]

I called the insurance commission and they told me it was a Medicaid thing. That Medicaid was the boss of this type of insurance and they could not help. That I would have to go to the Medicaid people. I wrote letters to Senator Thad Cockren, Ralph Wicker and my Representative Gene Taylor, the Governor of Mississippi and the Lieutenant Governor. I got a call from the Lieutenant governor, he said he would forward my letter on to Gene Taylor%u2019s office. I had already got a call from Gene Taylor%u2019s office that morning. They are sending my letter on to CMS who is supposed to be over things like this. A few days later Gene%u2019s office called and needed the Humana number so CMS could get with Humana. That was last Monday. The lady at Gene%u2019s office said it would tak about 10 days to 2 weeks to hear back from them.
Like I stated before be careful when dealing with Humana. Oh by the way, my wife is paying for the Complete Plan.