International Physicians Management Services
Managed Care Litigation
State Supreme Court Outlaws Balance Billing
NPI ~ Update
ALERT - Be Very Aware!
Fraud Alerts
Practice Management Issues
IVIG Reimbursement
Physicians Resources
Our Services
Contact Us
UCLA Physician Services
Health Net to Pay Physicians 
$40million Settlement.

United States District Court

For the Southern District of Florida

Miami Division


The Action involves all of the direct and indirect subsidiaries and affiliates of

Health Net, Inc. involved in the health care business,

including Health Net of California, Inc.


You may be a member of the Health Net settlement class

in this Action if you have submitted claims to any of these Health Net entities

or to other managed care companies.



Re: Managed Care Litigation


Notice of Proposed Settlement of Class Action with Health Net.


If you are a physician who provided covered services to any individual enrolled in or covered by certain health care plans at any time between August 4 1990 and May 10, 2005 or a physician group or a physician organization that includes such physicians, please read this notice carefully.  This class action and the proposed settlement may affect your rights.



What is this litigation about?


This Action has been brought by the representative plaintiffs, who are practicing or retired physicians from around the United States, on behalf of a class of physicians, and by certain medical societies, against a number of health care insurance companies, including Aetna, Anthem, Inc., Cigna, Coventry Health Care, Inc., Health Net, Inc., Humana Health Plan, Inc., Humana, Inc., PacifiCare Health Systems, Inc., Prudential Insurance Company of America, United Health Care, United Health Group and Wellpoint Health Networks, Inc (collectively the “Defendants”).  The complaint in the Action alleges that between 1990 and present, these companies engaged in a conspiracy to improperly deny, delay and/or reduce payment to physicians, physician groups and physician organizations by engaging in several types of allegedly improper conduct, including:


  • Misrepresenting and/or failing to disclose the use of edits to unilaterally “bundle”, “downcode” and/or reject claims for medically necessary covered services;
  • Failing to pay for “medically necessary” services in accordance with member plan documents;
  • Failing and/or refusing to recognize CPT modifiers;
  • Concealing and/or misrepresenting the use of improper guidelines and criteria to deny, delay and/or reduced payment for medically necessary covered services; 

  • Misrepresenting and/or refusing to disclose applicable fee schedules;

  • Failing to pay claims for medically necessary covered services within the required statutory and/or contractual time periods;

  • Misrepresenting and/or failing to disclose the use of inappropriate or unsound  criteria to determine payments due to physicians, physician groups and physician organizations compensated under “capitation” systems;
  • Failing to pay “actuarially sound” capitation rates;
  • Failing to timely assign members to physicians, physician groups and physician organizations compensated under capitation systems

The complaint claims that this conduct violated various state and federal statutes.  The named plaintiffs in the complaint also seek recovery on various common law theories, including breach of contract, based on practices such as those summarized above. 



The Settlement Fund:


In addition Health Net will make a settlement payment of Forty Million Dollars ($40,000,000) which, together with accrued interest from the date of Preliminary Approval, will be distributed as follows:


One Million Dollars ($1,000,000) will be set aside to fund settlement compliance activities.


The remaining Thirty-Nine Million Dollars ($39,000,000) will be distributed to physicians who are members of the class under the proposed settlement and who file a Proof of Claim.  If the settlement is approved by the Court, these members of the Class will be entitled to payments from the settlement fund in accordance with formulas that are set forth in the Settlement Agreement.


If you are an individual physician, or the heir of a deceased individual physician, who is eligible to participate in the settlement fund, you may submit a claim.  Call Health Net Physician Settlement Administrator for a form 1-866-254-8048. 


Claims must be mailed in NO LATER THAN SEPTEMBER 21, 2005.



If you would like further information about the claims asserted in the Action, you can review a copy of the complaint at 



It is also available at: