The California Medical Association may have scored a major victory this year against insurers and health plans thanks to the efforts of Assemblyman Hector De La Torre (D-South Gate).

"The bill is very expansive--it's a huge, huge victory for doctors," says Dustin Corcoran, CMA vice president of government relations. "This bill would not have gotten out of the Senate Health Committee but for the author, Hector De La Torre." The bill, AB 1324, prohibits health plans from retroactively canceling policyholders and establishes that health plans confirm a patient's eligibility when they authorize treatment, a measure that prevents plans from denying doctors payment for services rendered.

At press time, AB 1324 had passed the Assembly and the Senate, but had not yet been handled by the governor, who must sign or veto the bill by Oct. 7. But De La Torre is optimistic about its chances. "It's like reading tea leaves. The people who he'll be listening to, I think, favor the bill--his personal staff and the affected agency," he says, referring to the Department of Managed Health Care.

When his bill came up for consideration in the Health Committee, De La Torre says he "wouldn't take no for an answer." Among the solid votes for and against the bill, three members were undecided, he says. De La Torre remembers spending at least five hours working to provide those members with information they needed. And to show good faith, he agreed to amend the bill to keep it from interfering with ongoing lawsuits against health plans. "At the end of the committee's workday, they voted on it, and I was able to get the bare minimum votes to get it out of committee."

Health plans can legally cancel coverage due to applicant fraud. But several California lawsuits allege that plans rescinded policies for minor mistakes and company errors.

De La Torre was outraged after reading a Los Angeles Times series last year on rescinded coverage, and he worries that a childhood illness may prevent his daughter from retaining a policy. "It's [insurance companies'] job to check on things up front," De La Torre says. "If they sign a person up and start taking his premiums, they're responsible for that customer."

In a June report, the California Department of Insurance reviewed a sample of the 1,880 individual health policies BC Life & Health revoked in the state from 2004-05. The agency charged that 49 of 83 cases sampled violated fair-claims handling laws. In March, the DMHC fined Blue Cross of California $1 million after finding that the company illegally canceled health policies during the same period.

The DMHC is now surveying the cancellation practices of Blue Shield, HealthNet, Kaiser and PacifiCare. The Department of Insurance is examining Aetna, Cigna, Blue Shield and HealthNet.