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The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »

Health Net, Inc.

Bates v. Health Net (Policy Rescission)

Date: 02/21/2008 (Date of Arbitration Decision)

Misconduct Type: Health

Enforcement Agency: Non-Governmental

Contracting Party: Non-Governmental

Court Type: Civil

Amount: $9,368,117

Disposition: Judgment Against Defendant

Synopsis: Patsy Bates, who sued Health Net after the company cancelled her coverage while she was undergoing chemotherapy for breast cancer, was awarded over $9.3 million by a California arbitrator. Arbitration judge Sam Cianchetti found Health Net had failed to satisfy the obligation of good faith and fair dealing it owed to Patsy Bates and ordered Health Net to pay Bates’ unpaid medical bills, plus damages and interest. During the hearing, it was revealed that Health Net established goals and paid bonuses based in part on how many individual policies were cancelled and how much money was saved. After the decision, Health Net announced a freeze on policy cancellations “without a binding external, third-party review process” and promised a review of its broker training policies. See related Health Net, Inc. instances, “Policy Rescission Program Investigation” and “Policy Rescission (L.A. City Attorney Lawsuit).”