Archive for the ‘Healthnet’ Category


Signatory medical societies prosecuting the national class-action lawsuit against HealthNet have reached a settlement agreement. This is the third of six national class- actions against major healthcare insurers to reach settlement. The agreement must be approved by the U.S. Federal District Court in Florida. The hearing is set for September 19, 2005. If approved, the settlement agreement will cover approximately 900,000 physicians. Class members who wish to opt-out of the settlement agreement must do so by August 22, 2005.

U.S. District Judge Federico Moreno on Monday approved $167 million in settlements reached by Health Net and Prudential Financial Services in a class-action lawsuit filed on behalf about 950,000 physicians.

In the lawsuit, physicians allege that Anthem Blue Cross and Blue Shield, Coventry Health Care, Health Net, Humana Health Plan, PacifiCare Health Systems, United Healthcare and WellPoint Health Networks delayed or denied reimbursements for medical services and illegally rejected claims for necessary services as part of a racketeering conspiracy.

Aetna and Cigna, which also were named as defendants in the lawsuit, have settled with the physicians for a combined $1.01 billion. Aetna purchased Prudential in 1999 (California Healthline, 5/4). WellPoint and Anthem, which merged late last year, also have reached tentative settlements in the lawsuit.

Terms of Settlements

Under the settlements, Health Net will pay $40 million to active and retired physicians, as well as $20 million in legal fees for the physicians. In addition, Health Net will pay an estimated $80 million to improve the system that the company uses to process reimbursement claims.

Prudential will pay $22.2 million to improve managed care, as well as $5 million in legal fees for the physicians. Prudential also will monitor payment of other settlements in the lawsuit.

Harley Tropin, lead attorney for the physicians, said, “These latest settlements are significant in the changes that will be made in the treatment and payment to doctors similar to those agreed to by Cigna and Aetna.” According to Tropin, attorneys for the physicians have entered negotiations with the four defendants that remain — Coventry, Humana, PacifiCare and UnitedHealth — with the lawsuit scheduled to proceed to trial in January 2006.


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