Health Net fined over mishandled claims in Connecticut

The California-based plan was forced to reimburse patients and pay fines.

By Emily Berry — Posted April 22, 2009

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Connecticut has ordered Health Net to pay $1.3 million in fees, fines and repayment of mishandled claims.

The California-based plan was fined based on findings of a routine market conduct examination by the Connecticut Insurance Dept.

The state study found that on several occasions, the company was late in responding to precertification requests and appeals, that it failed to put appeals language in bold print in letters denying precertifications or appeals and that it failed to give the recipients forms to appeal to the state insurance department.

The plan has paid $750,066 to members whose claims were mishandled, fines of $496,000 and a $60,000 contribution to the Insurance Dept. Education Account.

The findings were based on the company's claims handled over the 2006 calendar year, which the insurance department examined beginning in December 2007.

Health Net spokeswoman Alice Ferriera said the company does not dispute the findings of the report. She says it has resolved nearly all of the problems the report identified, including some the company itself uncovered.

She noted that the claims the department found were mishandled represented a small fraction of the 7.5 million Health Net processed in Connecticut over the examination period. "But certainly they need to be dealt with," Ferriera said. "We want them to be 100% correct."

Connecticut Medical Society President William A. Handelman, MD, a nephrologist practicing in Torrington, Conn., said as Health Net has lost market share across the state, its service has suffered.

"I don't think any of this surprises us," he said. "Hopefully going forward they will improve, but that will depend on what the future of Health Net is."

In response to declining profits, Health Net has been seeking a buyer or some kind of business arrangement to free up cash from its operations in Connecticut, as well as New York, New Jersey and Arizona.

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