City prosecutor sues 3 health insurers for allegedly misleading directories

San Diego City Attorney Mara Elliott. Photo by Chris Stone

The San Diego City Attorney’s Office filed lawsuits Friday against a trio of health insurers for allegedly misleading consumers about the extent of coverage and services within their networks.

Kaiser, Molina Healthcare and HealthNet are accused of falsely representing the services available under their plans by inaccurately listing which doctors are in their networks, according to lawsuits in San Diego Superior Court.

The city attorney’s office alleges that by publishing inaccurate supplier directories, which many consumers use to evaluate insurance plans to purchase, health insurance companies profit by making their coverage appear more comprehensive than it is not in reality and therefore more attractive to potential registrants.

These “shadow networks” also help insurers eliminate patients who require specialized and often expensive care, as they can be frustrated by repeated and unsuccessful attempts to obtain coverage through inaccurate directories, according to the lawsuits.

A spokeswoman for Kaiser said the company had yet to see the complaint and could not comment. Molina Healthcare and HealthNet did not immediately respond to requests for comment.

According to the city attorney’s office, Molina’s directories have an error rate of up to 80%, while Kaiser and HealthNet have inaccuracy rates of at least 35%.

“Consumers should be able to trust their health insurers when seeking medical care,” said San Diego City Attorney Mara Elliott. “Directories filled with errors create dangerous barriers to health services, with patients struggling to find a physician listed in the directory who will accept their insurance. These deceptive ghost networks not only violate state law, but undermine the health of San Diego and Californians. “

The lawsuits allege false advertising and illegal business practices under federal and state law.

More than a million people statewide are enrolled in the health plans of the three companies, according to the city attorney’s office.

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