The California Department of Managed Health Care (DMHC) fined Health Net, Inc. $1 million for failing to disclose an employee bonus program based in part on the cancellation of individual insurance policies. According to the DMHC, on two separate occasions in October and November 2007, Health Net failed to disclose to investigators the existence of the bonus program, which awarded bonuses to employees who met or exceeded goals for health insurance policies that were rescinded after large medical claims were paid. The program was discovered in the course of a lawsuit filed by Patsy Bates, a Health Net policy holder whose coverage was dropped while she was undergoing treatment for breast cancer. The DMHC continues to investigate the policy rescission practices of Health Net and other managed-care companies in the state. The probe of Health Net, scheduled to conclude sometime in early 2008, could result in more fines. See related Health Net, Inc. instance “Bates v. Health Net (Policy Rescission).”