By MATTHEW STROZIER

NEW YORK - In a class action lawsuit involving thousands of people, a New York State judge last week found Oxford Health Plans Inc., a leading health management organization (HMO), liable for breach of contract and deceptive trade practices in retroactively denying health care coverage to people who had failed to pay their premiums. The decision came as a summary judgment from Judge Stephen G. Crane on Jan. 27. Crane ordered the two sides to rail to resolve four other claims of the plaintiffs.

The damages stemming from the decision against Oxford have not been determined and the lawyer representing the plaintiffs, Krishnan Chittur, declined to say what the amount is likely to be. It may be settled in the coming few months, he said.

Chittur said that tens of thousands of people may be eligible to make claims under the decision against Oxford.

The case was filed in 1996 by three people, one of whom, Varoujan Makastchian, alleged that she was notified her insurance has been terminated the day before she was scheduled to deliver her baby through Caesarean section.

The termination was retroactive four months earlier, meaning that Makastchian was responsible for all medical bills incurred in that time, Chittur said.

Makastchian had to scramble around to find several thousand dollars in cash in order to pay for the procedure. "Can you image the situation?" Chittur said. "It is absolutely inhumane."

The plaintiffs argued that as with most other insurance policies - fire, home- they deserved to receive a 30-day advance notice before being terminated. Even though they had been terminated, Oxford continued to precertify medical services and send them billing statements.

Oxford, however, contended that it was not required to give the plaintiffs notice of termination when the reason was nonpayment of premiums. A spokesperson for Oxford was unavailable for comment to India Abroad on the case at press time.

Although Oxford lost on two major points, Crane did side with the HMO in restricting the number of people eligible to file as plaintiffs because the company changed its regulations after 1996.

Chittur said he hoped Crane's decision would end what he said was an industry practice of termination without notice.

"I think that (the policy) is absolutely perverted and I don't know who the genius was who thought of it." Said Chittur. "Because frankly, I was shocked when I found out about it."

The decision comes at a time when Oxford is struggling financially and coming under increasing criticism from its members.

Last week, the New York City Public Advocate released a report that showed a dramatic increase in the number of New York customers filing complaints against Oxford in recent years.

In 1993, there were 134 valid complaints against Oxford; in 1997, there were 742, according to the report.

It ranked second highest in number of complaints in the state in 1997, the public advocate found.