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NY attorney general sues insurer over denial of hepatitis treatment coverage

New York Attorney General Eric Schneiderman filed a lawsuit inNew York Supreme Court against CapitalDistrict Physicians' Health Plan Inc., alleging that the company unlawfullyrestricted coverage of treatment for chronic hepatitis C infection in violationof New York State Insurance Law and Public Health Law.

The lawsuit alleges that Capital District denied coverage forsuch treatment unless the member demonstrated advanced disease, such as moderateto severe liver scarring. Members diagnosed with early stage chronic hepatitis Cinfection must monitor their disease and wait until they develop liver scarringor other advanced disease before their treatment will be covered.

The complaint further alleges that Capital District may haverestricted coverage of hepatitis C treatment because of the potential expense, yetits plan documents never disclosed to current or potential members that it consideredcost when deciding whether treatment for a disease would be covered by the plan.By failing to disclose that cost is a consideration in making determinations asto whether and when treatment is deemed "medically necessary," and byfailing to cover treatment for hepatitis C even when it meets the plans' definitionsof "medically necessary," the lawsuit alleges, Capital District is misleadingits members about the scope of their coverage.

Ali Skinner, Capital District's director of strategic communications,said the company covers hepatitis C prescription drug treatments in a manner comparableto virtually every other health plan, and that in some cases its coverage goes further.Skinner added that coverage decisions are made based on the use of evidence-basedclinical criteria, "not upon political agendas or actions." She furthernoted that the attorney general's office has filed the initial litigation againstthe company despite an ongoing dialogue between the entire industry and the state.