The California Department of Insurance issued an order to show cause against Health Net claiming the company violated state and federal laws by improperly reimbursing substance abuse residential treatment providers in 2015 and 2016. The order alleges Health Net failed to pay inpatient and outpatient claims according to its policy, resulting in the “underpayment and unfair settlement of claims.” The order also alleges Health Net referred provider claim requests without proper investigation. The order proposes penalties of $5,000 for each non-willful violation and $10,000 for each willful violation.