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N.J. Fines Health Net $41 Million

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New Jersey has ordered Health Net of New Jersey to $26 million in fines and interest over charges the company had underpaid some of its members.

The payments will be used to compensate 88,000 New Jersey members for alleged under-reimbursements for out-of-network services over more than a decade, according to the state’s Department of Banking and Insurance. These payments have already been issued to the affected members, DOBI says.

As part of the settlement, the subsidiary of Health Net Inc., Woodland Hills, N.J. waived its right to a hearing and agreed to pay $14 million in unpaid claims, $12 million in interest, $2 million in examination fees and a $13 million fine, DOBI says.

The department says the action is the result of a 21-month probe into claims paid by Health Net and its predecessors, First Option Health Plan of New Jersey and Physicians Health Services of New Jersey, for out-of-network service to persons covered in New Jersey between 1996 to 2006.

In July, a U.S. District Court judge in Newark, N.J. approved a $255 million settlement in 3 class action suits against the parent company and some subsidiaries, also involving charges of improper reimbursements for out-of-network treatments.


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