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How the Health Net Settlement Agreement helps the physician practice

The Health Net, Inc. (Health Net) Settlement Agreement (“Settle- ment”) provides for greater transparency in Health Net’s claims processing and payment practices. Through this Settlement, Health Net has agreed to update and increase the efficiency of its administrative and claims processing systems by improving the speed and accuracy of current information about its plan members’ eligibility. Health Net will lessen physicians’ adminis- trative burden by reducing the number of procedures requiring precertification and by reducing the number of services requiring submission of clinical information for precertification. In addition, Health Net has committed to disclose certain business practices and provide contracts to physicians in its provider network that conform to the Settlement.

Physicians should review all future Health Net contracts to make sure they include a clear written representation that the proposed contract does not waive or conflict with any of the business practice initiatives that Health Net has agreed to imple- ment under the Settlement. An example of such language is:

Health Net represents that nothing in this contract waives or conflicts with any of the business practice initiatives it has agreed to undertake pursuant to the Settlement Agreement dated as of May 2, 2005, in the In Re: Managed Care Litigation, MDL No.: 00-1334-MD-MORENO.

Under the Settlement, certain business practices are prohibited, such as: the inclusion of “gag” clauses in provider contracts as well as “most favored nations” clauses, “all products” clauses, and no “withholds” or “risk pools” to capitation payments. The Settlement also provides certain protections against “rental network” relationships with entities other than Health Net affili- ates. However, it must be underscored that physicians can waive the protections that are contained in the Settlement.

If a physician receives and signs a contract with terms that are inconsistent with the Settlement, the Settlement protections may be waived. Physicians should consult with their attorney before agreeing to waive any protections provided in the Settlement. Physicians should consider asking Health Net to identify and to explain in writing, each provision in the physician’s contract that is inconsistent with the Settlement. Signing a contract that is incon- sistent with the Settlement could result in a waiver by the physician of the protections provided to the physician in the Settlement.

Physicians should note that the Settlement provides that if state law offers more protection than the Settlement, then state law applies. Physicians need to be aware of relevant state laws and regulations, particularly in the area of prompt payment of claims, to ensure they receive all available protections.

Physicians should review all contracts from every payer to understand the implications of the contract on their practices before signing any contract. The American Medical Association (AMA) Model Managed Care Contract contains sample contract language designed to assist physicians in avoiding common contracting pitfalls. Visit www.ama-assn.org/go/psa where this material is available to AMA members at no cost.

This flyer does not summarize or identify all of the protections provided in the Settlement. If you believe Health Net is not complying with any of the Settlement provisions listed below, you may initiate a compliance dispute by filing a compliance claim form. This form is available at www.hmosettlements.com and at www.npmlaw.com. For more information concerning the compliance dispute process, visit the AMA Web site at www.ama-assn.org/go/settlements or contact the Health Net Compliance Dispute Facilitator, Cameron C. Staples, at ccs@npmlaw.com. The compliance dispute process is available to you at no cost and may be an effective way to ensure that Health Net honors its commitments under the Settlement.

Summary of “key” Health Net settlement provisions Coding rules

Health Net shall comply with most AMA Current Procedural Terminology (CPT®)* codes, guidelines and conventions, unless otherwise identified on Health Net’s physician Web site.

Health Net will not automatically reduce the code level or reassign the category (e.g., changing a consultation to an office visit) of an evaluation and management (E/M) CPT code for a covered service (“downcoding”).

If a bill appropriately contains a CPT code for the perform- ance of an E/M service appended with a CPT modifier 25 and a CPT code for the performance of a non-E/M service procedure code, both codes will be recognized and eligible for payment.

If a bill appropriately contains a CPT code for the perform- ance of a preventive medicine E/M service and a CPT code for the performance of a problem focused E/M service appended with a CPT modifier 25, both codes will be recog- nized and eligible for payment.

*CPT is a registered trademark of the American Medical Association © 2005 American Medical Association

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