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Physicians, Insurers Clash Over Medical Necessity in CA

Joe Cantlupe, for HealthLeaders Media, September 27, 2012

Physicians and insurers are pitted against each other in litigation being played out in Los Angeles over questions of what constitutes proper treatment, and a conflict over the definition of a medical necessity. The outcome of this dispute may have a rippling impact nationwide.

The tension is over what Rocky Delgadillo, CEO of the Los Angeles County Medical Association tells HealthLeaders Media is the "next frontier of patient rights." His organization represents more than 6,500 physicians, and has joined in a patient lawsuit against the California-based insurer, Health Net.

Among the questions being posed: What if the doctor rejects the procedure an insurer believes should be used for a rare surgery, opting instead for a more technically advanced procedure? What if doctors insist, 'This must be done to save a life,' but the insurers still say, "No"?

The LA story starts out simply enough: Two patients sued the insurer Health Net over procedures the company would not pay for. That doesn't seem unusual. Patients have battled insurers for years over reimbursement for procedures. But with the backing of the physician organization, this case takes on a slightly different tenor.

LACMA says that Health Net and other insurers are undermining medically necessary care by denying payments for technologically advanced, life-saving procedures. The lawsuit seeks injunctive relief to end what the LACMA describes as unlawful business practices by Health Net, and damages for the patients.

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