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Health Net underpaid Calif. physicians

NEWS IN BRIEF — Posted Jan. 31, 2005

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Health Net is planning to reimburse physicians a total of between $6 million and $7 million as a result of a recalculation of a faulty payment scheme that was in effect between January and October 2004, the California Dept. of Managed Health Care announced.

The plan also has agreed to pay a $250,000 fine and to pay patients to compensate them for money they may have been charged by doctors as a result of insufficient Health Net reimbursements during that period. The payments stem from reimbursements made to emergency department physicians and other hospital-based doctors who were not under contract with Health Net's network.

The Dept. of Managed Health Care concluded after an investigation that the Woodland Hills, Calif.-based insurer paid incorrect amounts on about 65,000 physician claims during the first 10 months of 2004.

"These doctors must be paid promptly and fairly in order for Californians to get the right care at the right time," said Cindy Ehnes, the agency's director, in a news release.

The agency said Health Net had violated rules that went into effect last year banning "payment practices that would result in systematic underpayments to doctors and health care providers," including those to out-of-network physicians. The fine assessed against the plan "is intended to deter future violations of [California] payment rules by Health Net and all other California HMOs," Ehnes said.

Health Net was fined $500,000 by New York officials in 2004 and agreed to refund $5 million to subscribers in that state after it was alleged that the company had used an outdated payment schedule to figure out-of-network medical reimbursements between July 1999 and December 2002.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2005/01/31/bibf0131.htm.

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