Health Net Settles With California Attorney General for $40M for Misleading Consumers

A healthcare company has settled with California Attorney General Rob Bonta for $40 million over information Bonta said was misleading consumers.

Bonta announced a settlement with HealthNet LLC, Health Net of California Inc., California Health and Wellness Plan and Health Net Community Solutions Inc. in partnership with the San Diego City Attorney’s Office.

The settlement resolves allegations that Health Net used inaccurate mental health and medical provider directories. Inaccurate provider directories mislead people who may purchase coverage based on the scope of the network in the directory then discover they are unable to obtain healthcare because providers are no longer contracted with their plan, providers’ contact information is incorrect, or providers are not taking new patients, according to Bonta.

The settlement, which also resolves these 2021 lawsuit filed by the San Diego City Attorney’s Office against Health Net, includes a $12 million monetary payment as well as injunctive terms requiring Health Net to correct inaccuracies and create processes to ensure the accuracy of its directories. These changes require Health Net to invest $28.5 million over six years to implement.

Health Net entities sell individual health plans, and administer employer, Medicare and Medi-Cal health plans for more than 3 million Californians.

As part of the settlement, Health Net has agreed to:

• Pay $12 million.
• Create automated processes to remove duplicate, unlicensed or deceased provider entries.
• Leverage technology, based on data from claims, contracts, utilization, and public databases, to verify the accuracy of providers’ contact information and of representations in each directory entry indicating whether each provider is currently accepting new patients.
• Identify providers who exclusively provide telehealth services.
• Display the date that each provider entry was last updated.
• Hire a consultant to advise Health Net on making the provider directory easier for consumers to use and providers to update.
• Operate a 24-hour phone line for customers who need help finding a provider.
• Promptly, clearly communicate to customers regarding these improvements, as well as customers’ right to coverage should they get out-of-network care in reliance on an inaccurate provider directory entry.

Topics California