Business
Health Net makes rescission deal
NEWS IN BRIEF — Posted Oct. 6, 2008
Los Angeles-based Health Net reached a settlement with the California Dept. of Insurance over allegations of improper policy rescissions over the past four years.
The company has agreed to pay a $3.6 million fine and an estimated $14.2 million in medical bills that would have been covered had the 926 former plan members' policies not been revoked.
In June, the health plan settled with the state's Dept. of Managed Health Care, which regulates HMO plans, over the same problem and agreed to offer coverage to 85 former HMO members and pay a $300,000 fine.
As in the earlier settlement, Health Net agreed to issue new policies to former members without an underwriting requirement or exclusions for preexisting conditions. Health Net has not admitted wrongdoing but has agreed to change its business practices to avoid future improper rescissions.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2008/10/06/bibf1006.htm.
