Hundreds of complaints from addiction treatment providers have prompted the California Department of Insurance to serve HealthNet with an Order to Show Cause and Notice of Noncompliance. Court filings indicate that the insurance company failed to meet the terms of its contracts with providers. Accusations from providers detailed an outright denial of legitimate claims or substantial underpayment.
The problem began late in 2015 and carried over into 2016. An investigation by the CDI determined that the insurer started to attack providers with accusations of insurance fraud. The company sent their claims to its special investigations unit without apparently reviewing them. The investigations bogged down providers' claims while withholding payment. While going unpaid, providers had to meet demands for excessive amounts of information about claims for covered and preauthorized treatments.
Providers that managed to emerge from special investigations reported payments well below what their HealthNet PPO policies had specified for services. Those insurance contracts stated that providers would receive 75 percent of their billed rates. Instead, HealthNet sent them compensation based on a per diem Medicare rate set for a completely different service. If found responsible for allegations of unfair and deceptive insurance practices, HealthNet might have liabilities totaling hundreds of millions of dollars according to court documents.
An individual or business in need of legal advice about an insurance dispute could consult an attorney. Research into insurance law as well as an evaluation of the applicable agreement could reveal contract violations. An attorney could file a lawsuit that might produce a pretrial settlement.
Source: Markets Insider, "Callahan & Blaine Sue HealthNet for Alleged Abuse of System in Accordance to California Department of Insurance Report", July 30, 2018