Sovereign Health Group Blog

Los Angeles California City Attorney sues Health Net for unethical business practices

Los Angeles California City Attorney sues Health Net for unethical business practices

Insurance company Health Net has found itself in a legal tangle for dabbling in unethical business practices. The office of Los Angeles California City Attorney Rocky Delgadillo recently filed a civil lawsuit against Health Net and initiated a criminal probe into the bonuses paid by the company to employees who came up with innovative ways to dupe policyholders.

The company allegedly pays handsome bonuses to those employees who are adept at finding ways to cancel policyholders’ coverage. The Attorney’s civil lawsuit was filed against Health Net, Inc., Health Net Life Insurance Co. and Health Net of California. Official press release from Delgadillo’s office said that these entities of the company face charges for unlawful, fraudulent and unfair business practices, and deceptive, untrue and misleading advertising in violation of California’s Unfair Competition and False Advertising laws.

According to the complaint, Health Net purportedly used false and misleading marketing techniques to enroll more members. They collected applicants’ medical histories with the help of misleading forms that called for them to make educated medical judgments.

Health Net accepted applications without any proper verification and meaningful review of the accuracy of responses. They did not seem to care about checking the antecedents or medical history of the applicants or seek confirmation that consumers understood the application.

Delgadillo further alleged that it was only after policyholders submitted claims for medical services that the company retroactively conducted investigations into their medical history so that they could spot any discrepancies in the application for delaying payment or canceling the coverage.

The erring company now stares at coughing up civil penalties up to the tune of $2,500 for each violation. The lawsuit sought a complete restitution to the victims who had to forgo their promised insurance and reinstatement of their canceled policies.

Citing the hapless situation of thousands of Californians, Delgadillo said that Health Net gave false promises to people who were under the impression that they had adequate coverage. However, little did they know that their insurance company was going to turn them away at a time when they needed the insurance the most, either by not paying for the care or canceling the policy altogether. The attorney’s office is bent on abolishing these nefarious schemes of a few unscrupulous insurance companies.

Health Net and Sovereign Health already locking horns 

The lawsuit against Health Net is not just a one-off case. The insurance company has already rubbed many treatment caregiver organizations the wrong way. Sovereign Health is also suing Health Net for $55 million for refusing to reimburse its services provided to patients who had taken insurance coverages from them.

If this planned and vicious attack by insurance companies like Health Net on the behavioral health providers continues, it will rock the boat for both the patients and the care providers. It directly threatens the sustenance of many rehabilitation facilities on which millions of patients are dependent.

The Sovereign Health lawsuit alleged that Health Net is “engaged in a disgraceful scheme to enrich themselves by backtracking on their insurance promises to recovering addicts and the mentally ill at the expense of providers who have devoted their professional lives to helping such individuals.”

Dealing with addiction and mental health problems

The only way to deal with an addiction or mental health issue is to seek early intervention. Sovereign Health is a leading behavioral health provider in the United States, with an expertise in providing addiction treatment. Our rapid detox centers in California are among the best in the country. Call our 24/7 helpline or chat online for further information.

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