Pomerantz Announces Final Approval of $250 Million Settlement
in Health Net Case;
NEW YORK, July 25, 2008 (LAWFUEL) — Pomerantz Haudek Block
Grossman & Gross LLP announced that, following a hearing on July 24,
2008, the Honorable Faith S. Hochberg of the United States District
Court for the District of New Jersey issued a ruling from the bench
approving a landmark settlement with Health Net, Inc. resolving three
related class actions that were filed by the Firm, as co-lead counsel,
on behalf of members of the Company’s health care plans. The primary
issue of this case is how Health Net determines reimbursement for
health care services from providers that are out-of network (“ONET”)
providers. In particular, plaintiffs alleged that Health Net relied on
improper means for determining usual, customary and reasonable (“UCR”)
rates for ONET services.
Under the terms of the settlement, Health Net will pay up to $215
million in damages to its members who have received reduced ONET
benefits. Of this amount, $175 million will be paid outright to the
members, and an additional $40 million will be paid upon submission of
evidence of payments to ONET providers or the receipt of bills from
these providers. Significantly, from this $40 million Health Net also
agreed to discharge many of their members’ liability to their ONET
providers, in order to make these members whole. In addition, Health
Net agreed to pay additional sums for ONET benefits going forward and
to make other valuable changes in business practices, valued between
$34 and $46 million. The mid-range value of the settlement is
approximately $255 million, which Pomerantz believes represents the
largest settlement of a health insurance ERISA action ever achieved.
According to Pomerantz partner, D. Brian Hufford: “This settlement
represents a major achievement in the fight against abusive health
insurance practices. We hope it is only the first step in reforming the
health insurance industry to ensure that members receive proper
coverage for ONET services.” Pomerantz partner Robert J. Axelrod adds
that, “We applaud Judge Hochberg for approving the settlement and
recognizing the important benefits it provides.” In addition to the
Health Net action, Pomerantz has pending cases against United
Healthcare, Oxford, Aetna, CIGNA and Wellpoint, all raising similar
challenges to these insurers’ policies for paying ONET benefits.
The Pomerantz Firm, which has offices in New York, Chicago, Washington,
D.C., Columbus, Ohio and the San Francisco Bay area, is acknowledged as
one of the premier firms in the areas of corporate, securities,
insurance and antitrust class litigation. Founded by the late Abraham
L. Pomerantz, known as the dean of the class action bar, the Pomerantz
Firm pioneered the field of securities class actions. Today, more than
70 years later, the Pomerantz Firm continues in the tradition he
established, fighting for the rights of the victims of securities
fraud, breaches of fiduciary duty, and corporate misconduct. The Firm
has recovered numerous multimillion-dollar damages awards on behalf of
class members.
If you have any questions concerning the Health Net matter or the
health care practice of the Pomerantz firm in general, please contact
Susan J. Weiswasser at 888.476.6529 (toll free) or
sjweiswasser@pomlaw.com.
