Insurance company knowingly engaged in rescission efforts against HIV patients, court finds

In upholding a South Carolina county court's ruling from 2004 that insurance company Fortis (now known as Assurant Health) wrongly terminated an HIV patient's health insurance, the state's Supreme Court uncovered an "unprecedented" number of HIV-targeted rescissions. While the state's ruling occurred last September, records from that case that recently were made public showed that Fortis used a computer program and algorithm to pinpoint insurance customers who recently had contracted HIV, with intentions to launch insurance fraud investigations those customers in order to ultimately get their policies canceled, according to a report from Reuters.

The plaintiff in the case, Jerome Mitchell, contracted HIV as a college freshman in 2002. In 2004, a Florence County (S.C.) jury ruled that Assurant needed to pay $15 million to Mitchell for canceling his policy after one note, written in error by a nurse, said that Mitchell may have been diagnosed with HIV before he purchased his coverage. Based on that note, in which the date was printed incorrectly, Fortis ignored all other medical records, including doctor's notes proving Mitchell's diagnosis came after he was insured.

"Fortis was motivated to avoid the losses it would undoubtedly incur in supporting Mitchell's costly medical condition," the Supreme Court wrote, although it did lower the amount awarded to Mitchell to $10 million.

Judge Michael G. Nettles, who presided over Mitchell's initial case in 2004, wrote that this instance wasn't the first time Fortis targeted patients with "life-threatening diseases."

"Fortis pre-programed its computer to recognize the billing codes for expensive health conditions, which triggers an automatic fraud investigation by its 'Cost Containment' division whenever such a code is recognized," Nettles wrote.

A federal investigator who looked into the case confirmed Nettles' statement, pointing out that policyholders found to have HIV were "scrutinized" more than other policyholders. "This was about money," said the investigator, who remained anonymous.

Peter Duckler, a spokesman for Assurant, said in a statement that the company "disagreed with the court's characterization" of the actions taken by the insurance company against Mitchell.

To learn more:
- read this Reuters article

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