Los Angeles lawyer Rocky Delgadillo made sure Health Net would feel the same pain that the insurer had inflicted on hundreds of policyholders. Delgadillo filed a lawsuit in the name of more than 1600 complainants, whose health coverage bought from Health Net proved useless when they matter most.
Media reports dubbed the legal battles instigated by the maverick lawyer as landmark cases. The narrative was familiar – David was going against Goliath, and the smaller of the two triumphed. The court found that Health Net arbitrarily and illegally canceled the claims filed by people who badly needed healthcare.
The court ordered the California insurer to fork out over $40 million for its cold-hearted business practice as compensation for the distressed policyholders. The lawsuits filed by Delgadillo covered cancellations that date back to 2004. As described by the lawyer, Health Net’s unacceptable tactics unjustly punished the most vulnerable.
And with the court decision, justice was duly served.
Practice Of Recission: A Devious Pattern
Delgadillo’s effort reflects an ongoing campaign by the California government to clamp down on erring insurance companies like Health Net. Recission is not an isolated practice in the state as regulators made clear that it has become a common practice, most notably by the big players.
The lawsuits, in fact, were instrumental in revealing that recission is part of Health Net’s policy. Court records showed cancellation of claims had become a company target. And insurers are making sure that employees have the motivation to push for the scenario. Health Net, for instance, offers bonus packages in order to meet the annual target of recissions.
Health Net was found guilty of fraud, and Delgadillo said what was proven merely exposed bits of the malpractices being carried by companies like Health Net for the longest time. The lawsuit contends recission is equivalent to a criminal offense as an insurer’s savings is nullified for unjust reasons. It’s even more revolting that prior to the deliberate cancellation, the policy was earning.
As Delgadillo pointed out in his arguments before the court, the insurers have always been the winner in the situation. And the policyholders were left helpless, minus the protection of the court.
Health Net Misdeeds Finally Revealed
Delgadillo said the successful class lawsuit called attention to the unlawful and unfair business practices by companies like Health Net. He hinted that the fraudulent acts could point to a pathway of criminal prosecution. According to the lawyer, it is restitution deserved by all victims – past and the ones he represented.
Health Net’s legal problems in California are just the tip of the iceberg. The company still faces the wrath of behavioral treatment centers in the state and their thousands of depressed patients. In recent years, the insurer’s decision to deny or reduce payments due to policyholders forced the shutdown of these care facilities. It remains to be seen how the people dependent on these healthcare providers would find their way back to stability.
