AIDS Healthcare Foundation Drops Lawsuit Against PacifiCare: AHF Victorious in Getting New Regulations Protecting HMO Patients.

Business Editors/Health & Medical Writers

LOS ANGELES--(BUSINESS WIRE)--Sept. 17, 2002

AIDS Healthcare Foundation:

-- Governor Davis Signed Landmark Bill (AB 2168) in September

2000 Mandating HMOs Provide "Standing Referrals" to AIDS

Specialists for HIV Positive Members. AHF Efforts Lead to

Additional State Regulations Soon Taking Effect

As new regulations supporting landmark legislation intended to improve access to HIV/AIDS specialists in managed care plans go into effect shortly in California, AIDS Healthcare Foundation (AHF), the nation's largest HIV/AIDS specialty care provider, today announced that it is dismissing a California lawsuit filed against PacifiCare of California over PacifiCare's provision of specialty care and referrals to its HIV/AIDS patients. The suit, which was filed in August 2001 in Superior Court in Los Angeles (Case # BC 255820) is being dismissed "without prejudice," leaving AHF the option to re-file the case if it deems it necessary.

"Through a determined mix of legislation, litigation and regulations, we are achieving our goal to improve access to HIV/AIDS specialty care for managed care plan members here in the state," said Michael Weinstein, AHF's president. "Now, California HMO members with AIDS or HIV should have greater access to ongoing specialty care -- and recourse if their health plan fails to provide it. This lawsuit helped achieve this goal. As a result, AHF believes it is in the best interests of PacifiCare's members with HIV/AIDS, on whose behalf AHF brought this case, that the lawsuit not continue, and wait to see if PacifiCare complies with these new regulations."

Last year, AHF sued PacifiCare HMO over its concerns that PacifiCare failed to provide adequate care to its AIDS patients. "By failing to do right by AIDS patients, PacifiCare and others created the demand for this law and now for these new regulations," said Cesar Portillo, AHF's Chief of Public Affairs. "We see patients every day who can't get to specialists through the HMO labyrinth."

AIDS Healthcare Foundation helped develop the new HIV specialist accreditation and sponsored the initial state legislation mandating standing referral to such specialists (AB 2168 of 2000 by retired Assemblyman Martin Gallegos, D, Los Angeles).

"Over 21 million Californians belong to a managed care plan -- almost two-thirds of the state's total population of 34 million residents," said AHF's Portillo. "Of these 21 million managed care enrollees, over 2.3 million are covered under a PacifiCare managed care plan."

The implementation this month of these new California Department of Managed Care regulations closes a loophole -- including the definition of an HIV/AIDS specialist -- that some managed care plans sought to use to avoid complying with the law mandating HIV positive plan members receive "standing referrals" to a medical specialist for their HIV disease. HIV is a disease that is now widely considered a chronic, manageable disease for most patients. However, studies have shown that patients cared for by a provider with experience and expertise in HIV/AIDS tend to receive better care and have vastly improved outcomes.

"Although we are dismissing the complaint against PacifiCare, we will continue to monitor them and other HMOs closely for their compliance with AB 2168 and with the new regulations," said Portillo. "During the course of this lawsuit, we were heartened by its impact on prodding both HMOs and state regulators to insist on specialty care for people with HIV/AIDS. Now, we will let the legislation and these new regulations guide access to HIV specialty care. If this fails to do the trick, reinstituting the suit is always an option."

The lawsuit had been filed in California State Superior Court by AHF in August 2001 and was brought under California Business and Professional Code Section 17200, et seq., alleging PacifiCare engaged in unfair business practices in its dealings with members of the public in California with AIDS/HIV. The suit, which was prepared and filed in California State Superior Court in Los Angeles by AHF general counsel Tom Myers, sought injunctive relief directing defendant PacifiCare to comply with California law.

The motion to dismiss the suit from Superior Court was filed yesterday in Los Angeles. AIDS Healthcare Foundation (AHF) is the largest provider of specialized HIV/AIDS medical care in the United States. AHF serves thousands of patients in California, New York and Florida regardless of their insurance status or ability to pay. For information on this release, please contact Ged Kenslea, AHF Communications Director, at 323/860-5225 or Tom Myers, AHF General Counsel, at 323/860-5259 or visit www.aidshealth.org.