In a serious blow to California insurance regulators, a judge ruled that the state Department of Managed Health Care could not force Blue Shield of California, San Francisco, to pay for the weight-loss drug Xenical. Reversing a tentative ruling issued last week, Sacramento Superior Court Judge Emily Vasquez rejected the department's claim that a new law, which became effective in January, allows regulators to require coverage of drugs excluded under existing HMO contracts. The ruling caps a legal action that began in 2001, after the department fined Blue Shield $270,000 for having denied coverage of Xenical for a morbidly obese patient. The department had determined that the drug, although excluded from the patient's insurance policy, was medically necessary. An initial decision against the department was reversed after the state passed a law requiring HMOs to seek the department's approval before excluding any medications from members' policies. Blue Shield argued that the case involved a policy signed years before the law went into affect. The latest decision marks the second time the department has lost a bid to dictate insurers' coverage of so-called lifestyle drugs. In July 2002, another California judge ruled that the department could not require Kaiser Permanente to cover the anti-impotency drug Viagra. -- by Laura B. Benko
Judge decides Calif. can't order drug coverage
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.