Insurance companies are expected to provide their customers and patients with a certain level of care. Failure to do so may result in serious repercussions for the patients in question. Health Net is a major insurance provider in California who has a history of denying coverage for their customers for entirely illegitimate reasons. Stop Healthcare Denial serves clients all over the greater United States and helps them fight back against these dishonest insurance companies.
What is Health Net?
Health Net is one of California largest health care insurance providers. Via HMO (healthcare maintenance organization), POS (a point of service plan), insured PPO (preferred provider organization) and government contract subsidiaries, it provides health benefits to almost 6 million patients all over the United States. Furthermore, Health Net’s behavioral health services subsidiary (known as MHN) provides behavioral health, substance abuse treatment, and EAPs (employee assistance programs) for over 7 million individuals in all fifty (50) states.
The company has come under significant criticism for its controversial handling of patients’ claims and its tendency to reject necessary medical treatments that its patients request. Consequently, it has been the subject of various penalties and litigation. The company initially started as a non-profit corporation. However, when a California order in 1992 allowed the company to become a for-profit enterprise, it began to marginalize the interests of its patients in favor of maintaining sky-high profit margins.
Fines and Penalties Leveled Against Health Net
In 2007, Health Net was fined one (1) million dollars for having an incentive program that gave employees bonuses for revoking patients’ policies. Furthermore, the company also failed to disclose this fact to the California Department of Managed Health Care (also known as the DMHC).
The following year, Health Net was fined nine (9) million dollars because the company dropped a breast cancer patient while she was undergoing her chemotherapy treatment regimen. The ensuing scandal damaged the company’s reputation and lead to widespread outrage.
In 2013, the DMHC again fined Health Net. This time it was for $300,000 due to the company violating California health regulations that require “parity” in the insurance coverage of behavioral and medical health claims. There was also a lawsuit filed by the City Attorney of Los Angeles on behalf of patients and customers because of Health Net’s unscrupulous practice of issuing policies to new patients without proper review of the applications. Furthermore, the company had a practice of assessing patients’ medical histories only after claims were filed in an attempt to delay payment or cancel insurance coverage.
These various scenarios indicate that there is a long-running pattern of Health Net refusing to fairly and justly provide insurance coverage for its consumers. If you are a victim of these unscrupulous business practices and have suffered due to Health Net’s marginalization of patients’ medical claims, then you will likely need to seek out the help of an experienced law firm to mount an effective lawsuit and/or official complaint.
Lawsuit Filed By Sovereign Health
Unfortunately, these are just a small sample of Health Net’s dishonest dealings. The company has also come under fire for failing to reimburse various substance abuse clinics in both California and Arizona. Health Net was, until very recently, considered to be the health insurance provider of choice for people looking to get medical coverage to treat drug addiction and/or alcoholism. The company covered a substantial amount of substance abuse treatment for its patients and customers.
But in January of 2019, Health Net became the highly scrutinized target of a new lawsuit filed by a company named Sovereign Health. This is a California-based behavioral health organization that specializes in addiction rehabilitation and which oversees a large number of recovery centers in California.
The lawsuit claims that Health Net refused to reimburse Sovereign Health for approximately fifty-five million dollars ($55,000,000) in medical services that have been deemed necessary by clinicians involved with the centers. The lawsuit also claims that Health Net has acted in bad faith and with malicious intent, essentially willfully ignoring the medical insurance policies of thousands of its customers.
This is the second time in just over a year that state regulators have issued warnings to Health Net that the company is in gross violation of state and federal laws. The company’s refusal to pay substance abuse treatment providers has been summarily criticized and widely viewed as a malicious act. Furthermore, the warning from regulators could lead to millions of dollars in fines and penalties for the beleaguered company.
Due to this lawsuit, California's Department of Insurance (also known as the DOI) has become fully involved and, as of January 2019, has formally issued an order to show cause against Health Net. This order will set up an official hearing and could result in further fines and penalties in the hundreds of millions of dollars. In June 2017, the DOI issued an order to Health Net’s lawyers after various health care providers began filing official complaints about the company’s failure to reimburse legitimate medical expenses.
Sovereign Health also took the unprecedented step of having executives from over a hundred different treatment facilities, all of which have been shorted by Health Net, send official complaints and letters to state regulators. The investigation has also expanded to include treatment facilities in Arizona in addition to facilities in California.
The accusations that Health Net is facing are substantial and serious. It appears as if the company has a pattern of behavior that includes marginalizing vulnerable customers by denying them coverage and widespread dereliction of duty in fulfilling their obligations, financial and otherwise, to other entities in the healthcare industry.
Health Net and Illegitimate Denials of Coverage
As the investigation by the DOI has expanded, state regulators have also learned that beginning in 2016, Health Net referred all complaints to its internal Special Investigations Unit (also known as the SIU). They did so before they performed any kind of reasonable review of the claims. As lawsuits have begun piling up, some state authorities have also alleged that Health Net also “robo-signed” medical necessity denial forms. In other words, the company was so obsessed with denying claims that they did not even bother to review the relevant documentation; they just automatically denied coverage for thousands of patients.
State regulators and the DOI are now alleging that these unsavory business practices have resulted in widespread and illegitimate denials of medical services as well as the delayed reimbursement of claims. Authorities are also claiming that the company failed in its primary duty to its patients and customers by failing in its investigation and processing of coverage claims. As a result, significant portions of the California state insurance code as well as the federal Mental Health Parity and Addiction Equity Act of 2008, have been violated.
Due to the fact that health laws were willfully broken, Health Net is now required to request a hearing before an administrative law judge. This judge will hear arguments and review evidence to decide on a recommendation to Insurance Commissioner Dave Jones, who has the sole power to decide the final penalty for the company. As of now, unless the Insurance Commissioner decides otherwise, the penalty is $5,000 for each good faith and non-willful act and $10,000 for each malicious and willful act.
Health Net’s Justifications for Denials of Coverage
In the midst of all this criticism and the investigation raging around Health Net, the company brought further negative attention on itself when it sent out form letters to dozens and dozens of clinical providers in January of 2019. These form letters were meant to express concern about the legitimacy of some medical claims.
The letter was drafted by Health Net’s director of special investigations, the same department that was accused of robo-signing denials of coverage, and it gave providers five primary reasons for denying medical coverage and/or coverage circumstances that would merit greater scrutiny from the company:
- Patients who reside outside of the defined service area in the state of California should not be allowed to have coverage;
- Clinical providers who waive their patients’ copayments, coinsurance, and/or deductibles run the risk of having their coverage claims considered fraudulent by the company;
- Any and all billed rates for Health Net patients must not be any different from rates for non-Health Net patients;
- If any patients or other parties receive financial compensation and/or other benefits in return for referrals, then the payment may be considered inappropriate by the company;
- Any and all services being requested must always be deemed medically necessary.
The letter also included a request for paperwork and documentation from the various clinical providers to ensure that no improper claims had been filed. Investigators criticized the letter for essentially trying to place the blame on the clinical providers by insinuating that the company was being overly vigilant in denials of coverage due to a preponderance of fraudulent claims. According to investigators and state regulators, this is nonsense and patently untrue.
It is clear that this letter is indicative of wider problems in the company as a whole. For one, immediately denying claims without proper evaluation or analysis is unethical, illegal, and medically unsound. Secondly, the company is accused of denying services that were deemed medically necessary because the coverage claim review process had been totally and completely compromised.
Health Net’s primary obligation no longer lay with its patients or the state of California; it lay with increasing its bottom line. This meant that robo-signing denials of coverage were just the company’s way of ensuring that they would have to pay the least amount of claims possible.
What Can You Do If You Have Been Denied Coverage by Health Net?
Patients and customers who are just like you have suffered immensely due to the malicious and bad faith conduct of Health Net. If you have been taken advantage of or tossed aside by the company that was supposed to provide you with care and support, then you have several options available to you. It should be noted that all these options are best done under the guidance and support of a legal team who have experience in dealing with these types of cases. Remember to keep every piece of paperwork and piece of evidence; if you are able to provide a comprehensive paper trail that proves or strongly indicates Health Net’s malfeasance and mistreatment of you, then your case will be exponentially stronger and your financial compensation will be that much greater.
Because the investigation into Health Net’s malfeasance has grown complex and stretches out over several different agencies, as well as considering that the company has violated both state and federal laws, then it is vital that you have professional counsel. They will know how best to proceed and what tactic to take to give you the best chance of winning your case against Health Net.
That means if you want to try and get some level of financial compensation due to your mistreatment by the company, then you can always file a lawsuit. This suit may be filed in federal or in state court and will depend on the specifics of your case. Again, this should be analyzed by your legal team so that they may decide how best to proceed.
The primary state investigation into the company’s misconduct and unethical/illegal activities are being overseen by the Department of Insurance (the DOI). As stated above, the Insurance Commissioner will eventually decide what kind of punitive damages to impose on Health Net. However, it is important to note that those damages are punitive; that means that they are meant to punish the company in question. They are not meant to reimburse any of the aggrieved or victimized parties for their pain and suffering.
You may, however, file a complaint with the DOI that details exactly what the nature of Health Net’s malfeasance is. According to Insurance Code, Section 790.03(h) (also known as the Unfair Practices Act), there are a variety of potential actions taken by an insurance company that is considered unfair practices and is effectively illegal. Enforcement of this code is the responsibility of the DOI, which is given a fair amount of leeway by the state legislature to enforce these fair practices.
Some of these fair practices include misrepresenting to patients any pertinent facts and/or provisions as they relate to any issues of coverage, failure to promptly address and analyze any insurance claims, and failure to affirm or deny coverage promptly and reasonably. If you wish to file a complaint with the DOI, their headquarters are located in Los Angeles at the South Tower of 300 South Spring Street. You may also contact them by phone at 1-800-927-HELP or 213-897-8921.
Filing An Appeal Within the Company
For many patients, however, a quick turnaround is necessary for their medical coverage claim so that they may receive the treatment they so urgently need. It is possible to file an appeal with the company if they previously denied you coverage. This appeal may run concurrently with and independently of any lawsuit in the courts or any complaint with the DOI.
An appeal is officially the type of complaint you make when you want the company to change a decision regarding benefits and/or coverage. You will be required to file your appeal within sixty (60) calendar days from the date of the coverage denial letter that you received. Health Net may decide to accept an appeal beyond the sixty (60) days if you present a compelling case for an extension.
In order to file a standard appeal of coverage, you are required to send a written request that clearly states the nature of your complaint. This must include all relevant dates, times, persons, and places that were involved in your case. Instead of an appeal letter, you also have the option of completing the Medical Appeals & Grievance Department Request for Reconsideration form.
After Health Net receives your appeal, they have sixty (60) calendar days to reconsider their original decision. If the company rules in your favor, then they are required to issue reimbursement within sixty (60) calendar days of receiving your original appeal. If the appeal was in regards to authorizing some form of medical care, then the company has up to thirty (30) calendar days to make the decision (or sooner if your health demands it). For many patients, this is an absolute necessity as they must continue to receive medical treatment as the rest of the case is making its way through litigation.
If you truly pressed for time, then you, your doctor, or your authorized legal representative can request an expedited reconsideration of your appeal. This expedited process requires that within seventy-two (72) hours of receiving your appeal request, Health Net will try to render a decision regarding coverage. If absolutely necessary, and if your health condition allows it, then the company may extend this period of time to fourteen (14) days.
You may also appoint a representative at any time to act on your behalf.
Locate An Insurance Attorney Near Me
If you have been unfairly denied health coverage for important procedures, you may just be one of the thousands of victims of Health Net’s unscrupulous business dealings. It is truly unfortunate that a company would so mistreat its customers and take advantage of a vulnerable population, but that is the reality of the situation. Protect yourself and find an attorney who specializes in these cases. Stop Healthcare Denial can represent you, whether you are hoping to file a lawsuit or lodge a complaint. Reach our insurance lawyer at 310-695-5241 and get started today!