A federal judge has approved settlements that should help Health Net Inc. and Prudential Financial Inc. resolve litigation with 900,000 doctors.
Health Net, Los Angeles, is a managed care company that provides or administers health coverage for 6.5 million Americans.
Back in the 1990s, Prudential also owned a large managed care business, which it sold to Aetna Inc. in 1999.
In the late 1990s, lawyers filed a wave of suits accusing Health Net, Prudential and other managed care companies of working together to lower and delay payments to doctors in unreasonable ways. The courts consolidated the litigation in Miami under U.S. District Court Judge Federico Moreno.
Health Net and Prudential negotiated settlement agreements with the plaintiffs’ lawyers earlier this year.
Moreno now has issued an order approving the settlements. They will free Health Net and Prudential from the class-action litigation, although both companies may continue to face suits by doctors who have opted out of the settlement.
Prudential agreed to settle its portion of the litigation by paying $20.05 million into a compensation fund for doctors and $5 million to the plaintiffs’ lawyers.
Health Net expects to pay about $40 million to general settlement funds and $20 million to the plaintiffs’ lawyers.