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Under terms of the settlement, Health Net of Woodland Hills, Calif., was also ordered to make business practice changes valued at $40 million. The insurer does not admit liability by entering into the settlement.
The suits, which involved more than 2 million people in several states and extended back to 1997, charged Health Net with using a flawed database for reimbursing members who went out-of-network to be treated. The database was made by Ingenix, a subsidiary of UnitedHealth Group, a health care insurer based in Minneapolis.
Because Health Net systemically underpaid its members, the insurer is charged with violating the Employee Retirement Income Security Act, New Jersey's employer health plan law and the U.S. Racketeer Influenced and Corrupt Organizations Act, according to Wilentz, Goldman & Spitzer.
U.S. District Court Judge Faith S. Hochberg, of the U. S. Court for the District of New Jersey in Newark, tried the cases, which are known as Wachtel v. Health Net, McCoy v. Health Net and Scharfman v. Health Net.
