The Los Angeles city attorney has filed a lawsuit against Health Net for allegedly defrauding individual policyholders by dropping them if they incur large medical bills.
The lawsuit follows a $1 million fine levied by California state regulators in November on the Woodland Hills, Calif.-based insurer for lying to state investigators about an internal employee bonus program tied to policy cancellations. Health Net, one of Californias largest insurers, is still under investigation by the state and also faces legal challenges from former policyholders.
Health Net engaged in a wide range of unlawful, unfair and fraudulent acts and practices that are designed to deny consumers requiring an expensive medical procedure or course of treatment the benefits purportedly provided by (Health Nets individual) coverage, rendering that coverage largely illusory, according to the 48-page complaint filed by City Attorney Rocky Delgadillo in Los Angeles Superior Court.
Margita Thompson, spokeswoman for Health Net, said the company is taking the matter very seriously. She added that the insurer paid nearly $200 million in claims for 100,000 individual policyholders last year and has changed the way it reviews those policies. -- by Rebecca Vesely
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