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Health Carrier Agrees To $80 Million Settlement

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Health Net Inc. has negotiated an agreement that could resolve litigation with about 900,000 doctors.[@@]

Health Net, Los Angeles, is a managed care company that provides or administers health coverage for 6.5 million Americans.

Lawyers have filed suits accusing Health Net and other managed care companies of working together to lower and delay payments to doctors in unreasonable ways. The courts have consolidated the litigation in Miami under U.S. District Court Judge Federico Moreno. Moreno must approve the proposed Health Net provider settlement before it can take effect.

Health Net says it expects to pay about $40 million to general settlement funds and $20 million to the plaintiffs’ lawyers. The company also expects to spend about $20 million to change its business practices.

Under the terms of the proposed settlement agreement, Health Net is supposed to:

- Give doctors more information about claims payment practices.

- Pay claims submitted electronically within 15 days.

- Use a “uniform definition of medical necessity that includes references to generally accepted standards of medical practice and credible scientific evidence published in peer-reviewed medical literature.”

- Establish a billing dispute external review board.

- Establish an independent physician advisory committee.

- Give more information to doctors paid on a capitated basis.


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