Health Net Lifts Freeze for New Medi-Cal Enrollees

Health Net Inc. said Friday that it was rescinding a controversial policy that had prevented new Medi-Cal enrollees from accessing scores of doctors and 10 hospitals affiliated with Tenet Healthcare Corp. in Southern California.

The big health maintenance organization this month imposed the restriction for new members of Medi-Cal, the public insurance for the poor and disabled, in part to pressure Tenet to give ground in protracted contract talks.

But Health Net’s action drew criticism from physicians and consumer advocates and was being scrutinized by state regulators who were concerned about potential violations of patients’ rights.

Health Net said previously that its policy was aimed at reducing the risk of patient harm if negotiations broke down and resulted in the termination of contracts. The freeze steered Medi-Cal enrollees who signed with Health Net away from about 20 medical groups and hospitals owned by or affiliated with Tenet.

Health Net, which has one of the state’s largest Medi-Cal enrollments with almost 600,000, said members had plenty of other doctors and hospitals to choose from. Some patients and doctors complained the policy was not only limiting choice but disrupting care for families.

“It was inappropriate,” said Steven Thompson, vice president for government relations at the California Medical Assn.

In lifting the freeze, Health Net officials said Friday that their company and Tenet had made progress this week in what has been a yearlong dispute over reimbursement rates. Neither side would give details about the contract talks.

Separately, Health Net was sued late Thursday by the St. Joseph Health System, which operates hospitals and doctors’ groups in Orange County. St. Joseph and Health Net severed relationships at the end of last year, but St. Joseph said it sued to recover more than $18 million in unpaid or underpaid claims. David Olson, a Health Net senior vice president, said the two sides had been in discussions about claims but that the amount was overstated.