Treatment Centers Sue Health Net For Alleged Nonpayment Of Claims

Six alcohol and substance abuse treatment centers in California have filed suit against Health Net, claiming the Woodland Hills-based insurer stopped paying claims to treat its insured patients earlier this year.

            The suit said Health Net's HNLIC subsidiary in California and Arizona had been faithfully paying claims for substance abuse treatment for its enrollees until mid-January of this year, when it began sending out questionnaires to the centers to determine their eligibility to receive payments for care. The centers were asked to fill out the same forms for each claim that it submitted to HNLIC, according to the lawsuit.

            HNLIC offers an indemnity insurance plan with coverage for both in and out-of-network providers. The suit was filed last week in Los Angeles County Superior Court by out-of-network providers, including Alta Centers, Benchmark Transitions, Harmony Place, South Coast Behavioral Health, Destiny Recovery Center and Hotel California By The Sea.

            The suit claims that Health Net began rejecting claims as a way to save money as its acquisition by Missouri-based insurance giant Centene was being consummated earlier this year. That deal closed in March.

            “We are hopeful that administrative and regulatory action will also be taken by the Departments of Insurance in California and Arizona,” said Stampp Corbin, president of the Addiction Treatment Advocacy Coalition, a trade group.

            Health Net has yet to respond to the lawsuit.