CMA and CMA member Richard Jones, MD, have successfully challenged number of provisions in HealthNet’s standard physician contract that do not comply with the terms of the RICO settlement.
HealthNet is one of seven insurance companies that settled CMA’s class action civil racketeering (RICO) lawsuit against for-profit health plans. The settlement agreements required the health insurers to change their business practices to effect transparency and fairness in their relationships with physicians.
HealthNet’s physician contract conflicts with the settlement agreement in a number of ways. Among other things, the contract’s definition of “medically necessary” is inconsistent with the definition agreed to in the settlement. The contract also requires contracting physicians to participate in all of Health Net’s products, despite the fact that the plan agreed in the settlement not to require universal participation in its products. Additionally, the contract allows HealthNet to make unilateral changes to the contract without prior notification, despite agreeing in the settlement that it would provide at least 90days advance notice of material adverse changes.
CMA and Dr. Jones filed a dispute with the settlement compliance dispute facilitator. As a result, HealthNet agreed to mail contract addendums – addressing these issues and others – to all contracting physicians with standard Health Net contracts in California and 6 other states. The addendum will be distributed within 90 days of its approval by regulators. We will let you as soon as this date is known so that you can be on the lookout for this important document.
CMA continues to have concerns with the HealthNet contract that do not fall under the RICO settlement. CMA is working with the insurer to resolve these issues.
A detailed analysis of the contract, and its flaws, is available to members at the members-only website.
For information about the insurers’ specific obligations under the settlements and what you can do if you believe that the insurers are violating the settlements, please refer to CMA ON-CALL document #0108, “RICO Settlements,” or call CMA’s Center for Economic Services, 888/401-5911. ON-CALL documents are free to members at the members-only website. Nonmembers can purchase ON-CALL documents for $2 per page in the CMA Bookstore.
