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Separation of Medical Decisions and Financial Concerns

Provider Type

  • Physicians (does not apply to Cal MediConnect)
  • Participating Physician Groups (PPG)
  • Hospitals
  • Ancillary

Under California Health & Safety Code Section 1367(g), medical decisions regarding the nature and level of care to be provided to a member, including the decision of who renders the service (for example, primary care physician (PCP) instead of specialist or in-network provider instead of out-of-network provider), must be made by qualified medical providers, unhindered by fiscal or administrative concerns. Utilization management (UM) decisions are, therefore, made by medical staff and based solely on medical necessity. Providers may openly discuss treatment alternatives (regardless of coverage limitations) with members without being penalized for discussing medically necessary care with the member. Health Net requires that each participating physician group (PPG) and hospital's UM program include provisions to ensure that financial and administrative concerns do not affect UM decisions, and that each member of the PPG's UM staff sign an acknowledgment of this. Failure to comply may result in withdrawal of delegated UM and ultimately, termination of the Provider Participation Agreement (PPA) with Health Net.

Medicare Benefits and Beneficiary Protections

Health Net provides members, at a minimum, with all basic Medicare-covered services by furnishing benefits directly or through our PPG arrangements, or by paying for benefits. Health Net also provides mandatory and optional supplemental benefits. In addition, as a Medicare Advantage Organization (MAO), Health Net and its delegated PPGs must comply with Centers for Medicare and Medicaid Services (CMS) national coverage decisions, general coverage guidelines included in original Medicare manuals and instructions (unless superseded by regulations), and written coverage decisions of local Medicare contractors. Given that Health Net covers geographic areas encompassing more than one local coverage policy area, Health Net and its PPGs must apply the Medicare coverage policy specific to the member's service area

Last Updated: 10/31/2019