Health Net Is Fined for Underpaying Claims

Health Net of California has been fined $250,000 for underpaying some emergency room and other hospital-based doctors by as much as $7 million, the state Department of Managed Health Care said.

The department said it found that the Woodland Hills company had underpaid on 65,000 claims submitted by doctors who were not under contract with the health maintenance organization during the first 10 months of 2004.

On Jan. 1, 2004, a state law took effect that banned HMOs from adopting payment methods that systematically underpay doctors or other providers.

A spokesman said Health Net was satisfied with the resolution and had adopted a new method for paying out-of-contract doctors that complied with the law.

-- Lisa Girion