In one of the largest class action ERISA settlements ever achieved, Health-Net, Inc. has agreed to pay $215 million to resolve allegations regarding improper payments to members who submitted claims for out of network (OON) healthcare services. This lawsuit involves the use of the Ingenix claims system, a subsidiary of United Health, and itself an entity subject of inquiry. The suit alleged that Health-Net's use of the Ingenix database resulted in payments to providers at below market rates, ultimately costing plan members by artificially inflating their out of pocket expenditures. In addition to the cash payout, the settlement involved required changes in business practices that, perhaps, are most significant in identifying the universal problems that occur in OON claims management today. The business practice changes include the total elimination of provisions in Health-Net plans that involve payment for OON services based upon usual and customary rate practices, replacing it with an alternative payment methodology that will be fully disclosed. Additional requirements include changes to pre-authorization procedures, required negotiated fee agreement thresholds, changes to its explanation of benefits, and requirements regarding emergency room service payments.
The Health-Net case will, undoubtedly, be lauded as a victory for individuals and providers and may signal a new wave of adverse determinations in response to the alleged abusive practices among health plans relating to OON payments.