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The California Department of Managed Health Care (DMHC) has taken an enforcement action against Health Net of California, Inc. (Health Net) including a $225,000 fine for failing to properly reimburse thousands of claims to the plan’s providers. Through a routine financial examination, the DMHC found the plan failed to accurately reimburse a portion of its claims including interest and penalties. The plan has agreed to pay the fine, take corrective actions and remediated 34,433 claims totaling $1.2 million in payments to providers.
“Health plans are required to pay claims promptly and accurately to hospitals, doctors and other providers when health care services are provided to enrollees,” said DMHC Director Mary Watanabe. “Failing to pay provider claims on time can impact the financial stability of providers and the overall stability of the health care delivery system. Health Net has agreed to implement corrective actions including correcting $1.2 million in payments to impacted providers.”
BACKGROUND: California law requires health plans to timely reimburse provider claims, in this case 45 working days, and to notify the provider of a contested claim. Health plans must also reimburse claims correctly and include appropriate interest and penalties when claims are paid late. A health plan’s failure to reimburse at least 95 percent of complete claims with the correct payment (including interest and penalties) over any three-month period is considered an unfair payment pattern.
Additionally, health plans are required to have a Provider Dispute Resolution (PDR) process where providers can submit a dispute related to payments. Within five working days of a written decision in favor of the provider, the plans must pay past due payments, including interest and penalties.
WHAT PROVIDERS CAN DO: The Provider Complaint page on the DMHC website provides more information on how to file for a provider complaint with the Department.
