Health Net Settlement Notices Mailed
[Posted 06/30/05]

Physicians should have recently received material from the Health Net settlement administrator, containing details of the settlement agreement and information on the claim submission process.

As you know, CMA and more than a dozen other state medical associations agreed last month to a settlement with Health Net, one of six remaining health plan defendants in the RICO class action lawsuit pending before U.S. District Judge Federico Moreno in Miami. The suit alleges that the for-profit plan defendants violated federal law by using coercive, unfair, and fraudulent means to control physician-patient relationships.

Even if you did not treat Health Net patients, you are still likely eligible for a pro rata share of the $39 million. To be eligible, you need only have provided covered services between August 4, 1990, and May 10, 2005, to any patients covered by any of the defendants in this case—CIGNA, Aetna, Anthem, Coventry, Health Net, Humana, PacifiCare, Prudential, United Healthcare, and Wellpoint.

Physicians who did treat Health Net patients will be paid from the $39 million settlement fund based on their total volume of Health Net claims they submitted from 2002 to 2004. Physicians with less than $5,000 in Health Net claims will receive one share; those with $5,000 to $49,999 will receive five shares; and those with $50,000 or greater will receive 10 shares. The dollar amount of each share will be determined once all proof-of-claims have been submitted. The proof-of-claim deadline is September 21. Details on the filing process will be published in a future issue of CMA Alert.

In addition to the cash payments to physicians, the settlement also provides improvements to physician-related business practices and a patient-friendly definition of medical necessity. The settlement will also enhance communication between physicians and Health Net, reduce administrative complexity in claims payment, and improve the quality of the health care delivery system. These changes are expected to result in increased predictability and speed of claims payment, creating significant value for physicians by reducing time-consuming and costly administrative burdens. It will give physicians more time to focus on their central mission–providing health care to patients.

The settlement provides major protections both for fee-for-service PPO physician practitioners and for medical group and IPA physicians who contract with Health Net. Officials estimated the prospective relief through improved claims and payment procedures to be worth $80 million in the next several years.

Contact: CMA’s legal information line, 415/882-5144 or legalinfo@cmanet.org.