Lehman, et al. v. Health Net of California, Inc. et al, Los Angeles Superior Court Case No. BC567361
Consumer Watchdog has filed a class-action lawsuit on behalf of hundreds of thousands of California consumers against Health Net for misrepresenting its physician and hospital networks in order to boost sales during the Affordable Care Act’s ‘open enrollment periods’ in 2014 and 2015.
Of all the leading insurance companies in California, Health Net made the fewest doctors available to its enrollees in 2014, according to the lawsuit—less than half what some other companies are offering in Southern California—and made further reductions in 2015. As a result of Health Net’s limited hospital and doctor network, patients face delays in accessing needed medical care, and unpaid medical bills if they are forced to seek care out-of-network.
During the 2014 Open Enrollment Period, Health Net offered HMO and PPO plans to California consumers both inside and outside the Covered California exchange. But, as of December 31, 2014, Health Net cancelled its Covered California PPO plans. Consumers enrolled in the cancelled PPO plans must seek new coverage for 2015, including new so-called Exclusive Provider Organization (“EPO”) plans sold by Health Net. Compared to Health Net’s PPO plans, Health Net’s EPO plans offer 54% fewer doctors and no out-of-network coverage, a fact that Health Net misrepresented, according to the lawsuit. If a consumer receives care from a physician not participating in Health Net’s limited EPO network, the consumer must pay the full cost of care out-of-pocket.
The lawsuit alleges that Health Net violated California laws by:
- Misrepresenting to consumers that certain physicians and hospitals are participating in Health Net health plans when in fact they are not;
- Making false and misleading representations in advertising, marketing, and communications regarding provider networks;
- Misrepresenting the fact that new EPO plans provide access to far fewer doctors than other plans;
- Subjecting consumers to inadequate networks of physicians and hospitals, causing delays and interruptions in accessing needed health care; and,
- Subjecting consumers to exceedingly long wait times, regularly lasting several hours, on customer service telephone lines when consumers called to address these problems and misrepresentations.
The lawsuit seeks to require Health Net to establish sufficient provider networks and administer health plans in compliance with California law, and demands reimbursement of money paid by consumers as a result of Health Net’s illegal acts.
Download the lawsuit here.
Read the press release announcing the lawsuit here.
See KCBS coverage of Consumer Watchdog announcing the lawsuit.