Health Net agrees to $40 million settlement with California Attorney General, San Diego City Attorney 

SAN DIEGO (FOX 5/KUSI) -- The San Diego City Attorney’s Office, alongside California Attorney General Rob Bonta, reached a $40 million settlement with Health Net LLC on Monday, after alleging the company misled consumers.  

Health Net LLC, a healthcare insurance provider, was accused of inflating the availability of provider networks through inaccurate directories, according to a lawsuit filed by the San Diego City Attorney in 2021.  

As a result of the settlement, Health Net will pay $12 million enforcing California consumer protection laws and an estimated $28.5 million over six years for improving its directory accuracy.  

“Accurate provider directories are critical for patients seeking care,” San Diego City Attorney Heather Ferbert said. “When insurance companies misrepresent their networks, they create barriers that leave families scrambling and vulnerable patients without access to doctors they were promised.” 

The company will also have to provide updates quarterly to its printed directories and weekly to online listings. 

Bonta stated that California-based health insurance providers must provide accurate directories and information to the public. 

“If the directories are inaccurate, as Health Net’s were, consumers may suffer delays in finding care, or in some cases, may be unable to get vital care altogether,” Bonta said. “My office will continue to raise the bar for consumers and hold companies to the high standards of service their customers deserve.”  

Bonta stated Health Net has also agreed to operate a 24-hour phone line for customers, include the date a provider entry was updated last, hire a consultant to improve the directory and more.  

“I want to thank San Diego City Attorney Heather Ferbert for her partnership in this matter,” Bonta added. 

The original lawsuit came when former San Diego City Attorney Mara W. Elliott alleged Health Net, Kaiser and Molina Healthcare of misleading directories.  

“Error-filled directories create dangerous barriers to healthcare services, with patients struggling to find a directory-listed doctor who will accept their insurance,” Elliot said in 2021.  

The lawsuit alleged Kaiser and Health Net of having a provider directory error rate of 35% and Molina Healthcare of having an error rate of up to 80%. Kaiser and Molina’s cases are ongoing, according to Ferbert. 

“Access to care should not be a guessing game,” Ferbert said. “This case marks the first in a series of enforcement actions by our office, and we will remain vigilant in ensuring compliance across the health care industry to better protect consumers.”