Health Net has been fined $500,000 by the New York State Insurance Department and agreed to refund $5 million to policyholders for claims and interest for medical services. The Woodland Hills, Calif.-based health plan also agreed to create an appeals process for claims that have been partially or fully denied and will offer new appeals on some emergency room claims that were denied, insurance department officials said. The action is the result of a routine examination of the health plan, which revealed that Health Net had used an outdated schedule to determine some reimbursements for out-of-network physicians and other providers from January 1999 to December 2002. The department also discovered that Health Net had sent some policyholders explanation-of-benefits forms containing misinformation. Health Net has agreed to reprocess some claims and make payments based on updated schedules, officials said. A spokeswoman for Health Net, which has 260,000 subscribers in New York, said 19,000 affected policyholders will be receiving the reimbursement checks, which will be mailed out this week. "Obviously we take very seriously this market conduct review, but Health Net wants to make sure providers and members are assured that everything covered in this report has been fixed," the spokeswoman said. -- by Cinda Becker
N.Y. Insurance Dept. fines Health Net $500,000
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