(Health Net HMO policy misleads insureds)
Health Net refused the appeals of the insured patients for benefit resolutions, claiming that they should have paid the claims under their HMO or in-network benefits. It stated that if an insured is accepted to a facility by an out-of-network provider, all services obtained in connection with care will be provided under the Indemnity Coverage, regardless of whether the facility is in-network or not.
According to the complaints, Health Net covered the facility by the insured’s Indemnity Coverage, or out-of-network benefits, for those insureds who had treatment at an in-network facility and were admitted by an out-of-network provider. As a result, the insured patients had to pay increased coinsurance and deductible payments.
Consumer complaints were filed with the Office of the Attorney General (OAG) in 2007 against Health Net and its practice of funding in-network facilities and providers under liability protection.
A Health Insurance without Benefits
The OAG’s investigation revealed that Health Nets had Evidence of Coverage for its point of service products. It does not disclose Health Net’s approach of covering an in-network facility under the Indemnity coverage (or out-of-network benefit) when a member is accepted to that facility by an out-of-network physician. The EOC for Health Net’s Point of Service product misleads its insureds.
Health Net’s Evidence of Coverage (EOC) provisions indicate that it will always cover an in-network facility under the HMO coverage, rather than the Indemnity coverage (out-of-network benefit) depending on the circumstances.
In-network benefits were defined as the benefit level for Covered Services supplied by Advantage Platinum Physicians or Advantage Platinum Specialty Providers in the HMO Coverage EOC’s definition section.
Out-of-network benefits are any physician, healthcare provider, or facility licensed to offer healthcare Covered Services who is not an Advantage Platinum Physician or an Advantage Platinum Specialty Provider.
Suppose an insured receives care from an in-network/Advantage Platinum physician or at an in-network/Advantage Platinum facility. In that case, the care should be covered under the HMO Coverage as in-network, by these criteria. There is no reason for an insured to assume that an in-network doctor or facility is anything other than in-network.
For in-network providers, the complaints stated that Health Net processed claims for in-network providers under the Indemnity coverage (out-of-network benefit) when they delivered the provider services at an out-of-network facility in certain circumstances.
The OAG found that Health Net did not adequately notify its members of how it handled claims from in-network facilities and providers when the members’ treatment included out-of-network services.
Health Net was required to follow the following rules under the Assurance of Discontinuance:
- When a Member has both an HMO (in-network benefit) and an Indemnity (out-of-network benefit) component to the Point of Service Product, Health Net will arbitrate claims for in-network facilities member’s in-network benefits, regardless of the admitting provider’s status.
- If Health Net decides to reinstate the practice of classifying in-network facilities as out-of-network providers discharging a member, it will not do so until it meets with the AOG to discuss the issue.
- When a Member has both an HMO (in-network benefit) and an Indemnity (out-of-network benefit) under a Point Service Product, Health Net will litigate claims from in-network physicians member’s in-network benefits, whether the facility where the member is treated is in-network or not.
- Health Net will train its customer service representatives on the new policies and procedures.
- They told Health Net to track down all people who had been defrauded by the company and reimburse them within 45 days.
- Health Net was required to report to the OAG on any reimbursements provided to its insureds within eight months of the Assurance’s effective date. This report was supposed to include a list of the reimbursed Qualified Members. As well as a unique identifier for each such MemberMember, the amount refunded, and the transaction date.
Repeated criminal activity
Health Net has a history of defrauding customers and then paying hefty fines as a result. They approved a settlement of three class-action lawsuits that would have far-reaching — and costly — repercussions for the managed care business some time ago.
The health plan agreed to pay $215 million to more than 2 million members to settle allegations that its coverage of out-of-network claims was biased in its favor. Health Net is currently involved in a lawsuit with behavioral healthcare clinics in California and Arizona for improperly withholding claim payments totaling more than $150 million.
Health Net has repeatedly violated its duty of care and must be held accountable.
