The California Attorney General in partnership with the San Diego City Attorney’s Office announced a settlement agreement with HealthNet, LLC, Health Net of California, Inc., California Health and Wellness Plan and Health Net Community Solutions, Inc. (collectively, Health Net), resolving allegations that Health Net used inaccurate mental health and medical provider directories. Inaccurate provider directories mislead the public, who may purchase coverage based on the scope of the network in the directory, only to find they are unable to obtain necessary healthcare because providers are no longer contracted with their plan, providers’ contact information is incorrect, or providers are not taking new patients.

The settlement, which also resolves the 2021 lawsuit filed by the San Diego City Attorney’s Office against Health Net, includes a $12 million monetary payment as well as injunctive terms requiring Health Net to correct inaccuracies and create processes to ensure continued accuracy of its provider directories. These significant changes will require Health Net to invest approximately $28.5 million over six years to implement. Health Net entities sell individual health plans, and administer employer, Medicare, and Medi-Cal health plans for more than three million Californians.

“Under state law, all health insurance companies that do business in California must provide accurate provider directories, and Health Net is no exception. Today’s settlement will result in industry-leading changes – changes that are long overdue and that stand to benefit Californians,” said the California Attorney General. “If the directories are inaccurate, as Health Net’s were, consumers may suffer delays in finding care, or in some cases, may be unable to get vital care altogether. My office will continue to raise the bar for consumers and hold companies to the high standards of service their customers deserve. I want to thank San Diego City Attorney Heather Ferbert for her partnership in this matter.”

The complaint filed in San Diego Superior Court alleges that Defendants committed violations of Business and Professions Code, sections 17200 and 17500, among other statutes. Defendants denied wrongdoing. According to the Settlement Agreement “By entering into this Stipulation, Defendants do not admit any facts or legal claims alleged in the operative Complaint and is settling this matter for the sake of resolution.”

As part of the settlement, Health Net has agreed to:

– – Pay $12 million towards further enforcement of California consumer protection laws against any entity that is violating them.
– – Create automated processes to remove duplicate, unlicensed, or deceased provider entries.
– – Leverage technology, based on data from claims, contracts, utilization, and public databases, to verify the accuracy of providers’ contact information (e.g., name, address, phone numbers) and of representations in each directory entry indicating whether each provider is currently accepting new patients.
– – Identify providers who exclusively provide telehealth services in the directory.
– – Display the date that each provider entry was last updated.
– – Hire a consultant to advise Health Net on making the provider directory easier for consumers to use and providers to update.
– – Operate a 24-hour phone line for customers who need help finding a provider.
– – Promptly, clearly communicate to customers regarding these improvements, as well as customers’ right to coverage should they get out-of-network care in reliance on an inaccurate provider directory entry.