Health Net will pay $1.95 million in recession suit

by Lesley Politi on June 4, 2009

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Class action suit regarding Health Net policies that were canceled after 926 people were ill.

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By anne
Created May 27 2009 – 1:20pm

Marking another landmark in a titanic struggle between health plans, providers and consumers over the right to cancel policies, Health Net has agreed to pay $1.95 million to California hospitals to settle claims over rescission of individual policies.

The California Hospital Association had launched a class-action suit against Health Net bringing 200 hospitals together. It arose from Health Net’s decision to revoke individual policies during the period between February 2004 and October 2007.

The health plan had previously settled with the California Department of Insurance for $3.6 million in penalties, plus up to $14 million in reimbursements for medical charges, in regards to 926 people whose policies it canceled retroactively [1] after they became sick.

Under the terms of the settlement, Health Net has agreed to set up a fund to reimburse hospitals for services they provided to rescinded members. Health Net has also agreed to give hospitals a list of rescinded patients, so patients will be free from actions by creditors over unpaid bills.

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Good to see that Health Net did not get away with unpaid bills and breaking the law. Hopefully, this will not happen again.

Source: www.health-insurancecalifornia.com

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