Underpaying claims will cost health insurer $255 million — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Underpaying claims will cost health insurer $255 million

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The insurance firm Health Net will pay $255 million to settle three class-action lawsuits alleging it used a flawed database that sometimes under-reimbursed members’ insurance claims.

U.S. Judge Faith Hochberg, of the U.S. District Court for the District of New Jersey in Newark, approved the settlement, which included $215 million in payments to more than 2 million members in its health plans in several states.

It must also make changes to its business practices at a cost of roughly $40 million.

Ingenix, a division of UnitedHealth Group, created the database in question. A six-month investigation of Ingenix by New York Attorney General Andrew Cuomo found the company ran “a defective and manipulated database” that sharply underreimbursed members for out-of-network expenses.

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