Health Net Settles Class-Action Lawsuits on Out-of-Network Care
On Thursday, a federal judge in New Jersey approved a settlement that will have Health Net pay $215 million to settle three class-action lawsuits alleging that the insurer underpaid out-of-network claims for more than two million members, the Newark Star-Ledger reports (Whelan, Newark Star-Ledger, 7/25).
Under the settlement, Woodland Hills-based Health Net also will make about $40 million in changes to its business practices (AP/San Francisco Chronicle, 7/25).
Barry Epstein, a plaintiffs' attorney in the case, said the settlement is believed to be the largest class-action settlement ever reached in a health insurance case.
Health Net and several of its regional subsidiaries that also were named as defendants in the case did not admit liability in the settlement (Newark Star-Ledger, 7/25).
Epstein said the case centered on charges to Health Net members for out-of-network care. He said Health Net members paid more than they should have because the insurer was using an invalid database to calculate reimbursements.
The database, called Ingenix, is a subsidiary of UnitedHealth Group.
Epstein said the settlement is notable because Ingenix is widely used in the health insurance industry (AP/San Francisco Chronicle, 7/25).