Payer Acknowledges Improper Out-of-Network Reimbursements

New Jersey patients and providers recently enjoyed a victory in their long-running tug-of-war with payers concerning the reasonableness of out-of-network reimbursements.

Last Tuesday, the New Jersey Department of Banking and Insurance (“DOBI”) announced that Healthnet of New Jersey has agreed to pay $41 million to settle charges that it systematically underpaid out-of-network providers between 1996 and 2005. This payment consisted of $26 million in restitution and interest and a fine of $13 million.

Stethoscope on Dollars

In summarizing the Healthnet settlement, Commissioner Goldman of the DOBI explained: “Health Net dramatically underpaid claims to New Jerseyans to reimburse them for out-of-network health care services… I’m pleased that we were able to obtain the return of this money to Health Net’s New Jersey members, together with interest… The fine represents an appropriate penalty for this improper business practice.”

While the Healthnet matter has been resolved, many patients and providers continue to be perplexed by their rights relative to out-of-network encounters. Therefore, in upcoming blogs, we will be focusing on the issue of out-of-network reimbursement, with a focus on the nature of “usual, customary and reasonable” and recent litigation regarding out-of-network payments.

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