Judge Orders Preliminary Injunction Against Trillium and Health Net

Moving swiftly, a federal judge found that health insurers Trillium Community Health Plan and Health Net Health Plan had likely misled consumers about their Medicare Advantage plans for 2020 and ordered the two companies to post clarifying statements on their websites and send clarifying information to insurance brokers.

The temporary restraining was a win for PeaceHealth, the Vancouver, Washington-based hospital system, which alleged in a lawsuit this month that Trillium and Health Net had violated federal anti-fraud law by leading brokers and customers to believe that PeaceHealth would be an “in-network” provider for the two companies’ Medicare Advantage plans in 2020.

In its lawsuit filed in U.S. District Court in Eugene, PeaceHealth said that since April it had clearly and repeatedly notified Trillium and Health Net – both owned by Missouri-based Centene Corp. – that PeaceHealth was terminating its “in-network” relationship starting Jan. 1, 2020. PeaceHealth said Trillium and Health Net had put information on their websites and in their Medicare Advantage materials that stated outright or suggested that PeaceHealth would remain in-network in the two insurers’ Medicare Advantage plans for 2020.

The period for signing up for a Medicare Advantage plan began Oct. 15.

U.S. District Judge Michael McShane ruled Monday that the arguments he had heard from both sides last week lead him to believe PeaceHealth would likely prevail in its claim that Trillium and Health Net were violating the Lanham Act. For example, McShane wrote that as of late last week consumers searching Health Net’s Medicare Advantage website would find PeaceHealth doctors listed. But the site had no alert that the provider would not be in-network starting Jan. 1. McShane wrote that “PeaceHealth has demonstrated a consumer seeking to confirm whether a specific doctor is ‘in plan’ for Health Net’s 2020 offering is likely to be mislead by Health Net’s 2020 provider search function.”

“Any deceived consumers will be stuck (with Health Net) until the following year’s open enrollment,” McShane wrote.

“Especially given the vulnerable status of those affected, there is a grave risk of an ongoing threat to those individuals,” he wrote. A court order “is necessary to better inform the public of the dramatic changes” to Trillium’s and Health Net’s plans by the departure of PeaceHealth, he said. 

PeaceHealth has been in-network with Trillium and Health Net Medicare Advantage plans for many years, and PeaceHealth’s decision to leave effective Jan. 1 is a blow to the two insurers, narrowing their offerings to consumers.

McShane ordered the two insurers to post on their websites and send to their insurance brokers a statement in capital letters that said in part that the insurers “WILL NOT HAVE A CONTRACT WITH PEACEHEALTH BEGINNING JANUARY 1, 2020. AS A RESULT PEACEHEALTH IS NON-CONTRACTED AND WILL NOT BE IN-NETWORK.”

PeaceHealth had asked the court to order the website postings and statements to brokers. In a filing last week, Trillium and Health Net attorneys called such directives “unnecessary and improper” because the two insurers had notified all brokers as of early October that PeaceHealth would no longer be in-network on the Medicare Advantage plans in 2020 and had fixed any errors on their websites.

The lawyers said PeaceHealth had presented “no evidence of any lingering confusion,” and had not shown that any consumers had seen any misleading information on the insurers’ websites.

Medicare Advantage is a comprehensive health insurance plan for those 65 and over. Open enrollment runs until Dec. 7.

Many brokers and purchasers of health insurance give great weight to whether a provider is in-network. Having a provider in-network makes is much easier and cheaper for the consumer. If a consumer unwittingly uses an out-of-network provider, they can be stuck with hefty bills. Listing PeaceHealth as an in-network provider would make Trillium’s and Health Net’s policies more attractive to policy buyers, PeaceHealth said.

Eugene-based Trillium has 2,394 Medicare Advantage members, according to the latest figures compiled by Oregon insurance regulators. Tigard-based Health Net has 36,392 Medicare Advantage members.

According to the lawsuit, PeaceHealth has for years signed annually renewable Medicare contracts with Trillium and Health Net that listed PeaceHealth facilities in Oregon and Washington as in-network providers. PeaceHealth has 10 medical centers and a large network of clinics in the Pacific Northwest.

You can reach Christian Wihtol at [email protected].