Health Net inks $215M settlement on payment allegations

A federal judge has approved a $215 million settlement ending three class-action lawsuits alleging that health plan Health Net paid unfairly low reimbursements to out-of-network providers between 1995 and 2007. The class actions had alleged that the health plan had kept out-of-network payments unreasonably low by basing their pay schedules on a database of payment rates maintained by UnitedHealth Group subsidiary Ingenix. The suits contended that Ingenix rates were well below market.

While this settlement may end the current legal challenges for Health Net, the question of whether Ingenix itself will face bigger legal problems remains open. A similar suit seeking class-action status in Connecticut [1] has targeted Ingenix directly, as well as a number of insurance companies. And earlier this year, New York Attorney General Andrew Cuomo announced that his office would conduct an "industrywide" investigation of Ingenix's payment practices. However, to date Cuomo hasn't filed any lawsuits targeting the UHG subsidiary.

To learn more about the settlement:
- read this Modern Healthcare article [2] (reg. req.)

Related Articles:
UnitedHealth's Ingenix faces mounting legal troubles [1]
NY sues UnitedHealth over MD payments [3]
New York AG expands health plan investigation [4]