California Physician

Health Net RICO Settlement Checks Are in the Mail
[Posted 10/26/06]

Physicians who filed claims under the Health Net settlement will soon begin receiving their checks. California physicians and physician groups will receive a total of $13.2 million, which represents more than one-third of the $39 million settlement fund.

The pro rata share of the settlement is just under $60. Physicians will be paid based on the total 3 year volume of Health Net claims they submitted, as they indicated on the claim form they filed last fall. Physicians with less than $5,000 in Health Net claims receive one share; those with $5,000 to $49,999 receive five shares; and those with $50,000 or greater receive 10 shares.

Of even greater significance is the settlement’s prospective relief, which is valued at more than $80 million. Health Net has made a binding commitment to change the way it does business with physicians and to put a stop to the underhanded business practices that were used to deny or delay payment to physicians for legitimate claims. 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.

This settlement is the direct result of CMA advocacy and demonstrates the tremendous strength of CMA and its membership. In a historic action six years ago, CMA filed a class action lawsuit against for-profit HMOs in California. Eventually, more than 800,000 physicians and 19 state and county medical associations joined CMA as plaintiffs. The civil racketeering (RICO) lawsuit alleged that the HMOs used fraud and other illegal activities to interfere in the physician-patient relationship. The case, which became the largest class-action health care lawsuit in U.S. history, allowed physicians to air profound grievances against an industry that had arrogantly and unfairly exploited them and harmed their patients for more than a decade.

Of the 10 defendants named in the lawsuit, six have settled (including the merged Anthem/WellPoint/Blue Cross), and three had their cases dismissed by the court. The dismissal of the cases against United Healthcare and Coventry have been appealed.

It is essential that the plans abide by the terms of the settlements. CMA encourages physicians to help ensure these plans keep their promises. If you believe that a health plan is not living up to the terms of its settlement, please contact CMA’s legal department at 415/882-5144 or legalinfo@cmanet.org.

For more information on CMA's RICO lawsuit, including settlement agreements, compliance dispute resolution, and settlement enforcement, see the RICO Resource Center