Under the settlement, reached in Los Angeles Superior Court, Health Net agreed to pay at least $1.95 million to settle claims with hospitals that did not receive payments following rescissions, the CHA lawyers said.
The accord resulted from negotiations that have been ongoing between HLB and Health Net since July 2008, and covers rescissions by Health Net that occurred between February 2004 and October 2007, according to CHA lawyers.
"We are very pleased to have come to an agreement with Health Net that results in hospitals receiving substantial payments for the previously unreimbursed services that they provided to Health Net members who were rescinded," said CHA lawyer Glenn Solomon. "We believe that Health Net did the right thing here and appreciate its cooperation in reaching a mutually acceptable settlement."
Health Net will establish a fund to reimburse hospitals for the services they provided to rescinded members, according to CHA lawyers. In addition, Health Net will provide each affected hospital with a list of the patients whose policies were rescinded so that the hospitals and the patients can receive closure regarding the rescissions, the CHA lawyers said.