DMHC Fines Health Net for Underpayments to Emergency Department Physicians
The Department of Managed Health Care on Thursday said that it had fined Health Net $250,000 for not adequately paying about 65,000 claims filed by emergency department physicians who were not contracted with the insurer, the Los Angeles Times reports. The claims were filed between January and October 2004 (Girion, Los Angeles Times, 1/14).
A state law banning health maintenance organizations from using reimbursement methods that underpay doctors or other providers took effect Jan. 1, 2004. However, enforcement of the measure "has been limited," the Sacramento Bee reports. According to the settlement, Health Net paid noncontracted physicians about 80% the rate Medicare would have paid the physicians.
Under the settlement, Health Net also must contact all patients treated by noncontracted physicians and reimburse some patients for fees that should have been covered by the insurer (Rapaport, Sacramento Bee, 1/14). Health Net is expected to pay an additional $6 million to $7 million to health care providers and consumers. Under the terms of the settlement, Health Net must make the payments within six months (Skidmore, San Diego Union-Tribune, 1/14).
DMHC Director Cindy Ehnes said, "Emergency rooms, hospitals and the doctors who work there every day to save lives are the backbone of our health care system. These doctors must be paid promptly and fairly in order for Californians to get the right care at the right time."
California Medical Association spokesperson Peter Warren said, "If Health Net was willing to pay a fair price, Health Net would have contracts with enough doctors to care for all of its members. When physicians provide emergency services to an HMO member, the HMO must be responsible for payment whether there is a contract in place or not."
California Hospital Association Vice President Dietmar Grellmann said that the settlement "reinforces the fact that there is a state law and regulations that require health plans to pay hospitals and doctors promptly and fairly. It shows the DMHC is going to be serious about enforcing this law" (Sacramento Bee, 1/14).
DMHC Chief of Enforcement Amy Dobberteen said, "This is a substantial fine and is intended to deter future violations of the DMHC's payment rules by Health Net and all other California HMOs. The law prohibiting late or incomplete payments to doctors and other providers is the new weapon in the state's arsenal to combat wrongdoing by HMOs" (San Diego Union-Tribune, 1/14).
Health Net spokesperson Brad Kieffer said the company is "making a thorough examination of all claims made to determine which physicians may have been underpaid so that can be corrected as quickly as possible" (Rapaport, Sacramento Bee, 1/14).