State Fines Health Net $100,000 for Delays
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The state Department of Managed Health Care fined Health Net $100,000 on Tuesday for failing to pay claims in a timely manner.
The department said Woodland Hills-based Health Net, the state’s fourth-largest HMO, stretched hospitals and physicians beyond the 45-day statutory limit. Health Net also failed to pay interest on the late payments, the department said.
The fine is the second-largest levied against a health maintenance organization, said department Director Daniel Zingale. The department fined PacifiCare Health Systems Inc. $250,000 in March for similar violations.
Health Net acknowledged the delays, which occurred between 1996 and 2000. The company blamed a faulty “internal tracking system” that failed to flag overdue claims. Problems with its claims-processing software have been corrected, Health Net said.
“Health Net regrets the action was necessary and accepts responsibility for late payment of claims,” said spokeswoman Lisa Kalustian.
Health Net also is paying $54,000 in interest on overdue claims to health-care providers.
The department, in a letter to Health Net, said the number of tardy claims was “low relative to the number of claims processed on a monthly basis.” The number couldn’t be obtained.
The letter said the violations involved claims that were sent to an outside vendor for review or to be re-priced. “The department is concerned that delayed payment jeopardizes the health-care delivery system,” said the letter, signed by Assistant Deputy Enforcement Director Joan Cavanaugh.
The fine won’t have a material effect on Health Net, which reported second-quarter profit of $6.9 million.
Zingale said the department has fined Heritage Provider Network $50,000 for alleged late payment violations. The department also has told Heritage, which is based in Reseda and has 150,000 enrollees, to pay $200,000 in interest, Zingale said.
Further details about Heritage’s alleged violations weren’t available. A telephone call to its office Tuesday wasn’t returned.
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