$9 Million Settlement Handed Down in Health Net Lawsuit

Scott Kappes

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Today an arbitration judge issued an award of $9 million to a breast cancer patient whose policy was cancelled by Health Net Inc. The decision prompted Health Net to announce that they are scrapping its present and future cancellation plans that have been under fire recently by California state regulators and the Los Angeles city attorney, and have now cost them a whopping $9 million.

Arbitrator Sam Cianchetti, a retired Los Angeles County Superior Court judge, found that Health Net violated numerous state laws in canceling Patsy Bates' policy and declared the company's actions "despicable."

Health Net was also ridiculed for the company policy of tying employee bonuses to the number of policies cancelled. The arbitrator called the policy reprehensible in a 21-page opinion.

Health Net responeded by pledging to not cancel policyholders without the approval of a third-party review process.