Ileana Hernandez

Ileana Hernandez guides health insurance and managed care organizations through complex legal disputes.

One significant case in which she served as lead counsel involved successfully defending Health Net, a major health care insurance company, against a lawsuit brought by a group of substance use treatment providers. The case raised critical legal and public policy questions regarding the providers’ claims for unpaid or underpaid amounts, as well as issues related to fraud and the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Following a two-month jury trial, Health Net emerged victorious, with the providers being awarded nothing on their non-ERISA claims. The jury also found the providers liable under RICO, resulting in damages awarded to Health Net. A subsequent bench trial further solidified Health Net’s position, leading to the dismissal of all claims and the award of restitution.

Through such cases, Hernandez addresses significant legal rulings, such as the unlawful nature of provider inducements and their impact on claims and payment. She emphasizes that insurers can defend against nonpayment lawsuits by asserting fraud or unclean hands, and they may be entitled to restitution for previously paid claims obtained through unlawful practices.

“One of the challenges the Manatt team had to overcome in the Health Net case was the general misconception that health insurers avoid paying legitimate claims,” Hernandez said. “Throughout the six years of litigation and during trial, Health Net demonstrated that its refusal to continue paying for claims for services rendered to insureds who were seeking treatment for substance use and mental health issues was based on an extensive internal investigation that uncovered substantial evidence of the providers’ improper and fraudulent conduct that impacted many patients.”

Discussing trends in the health care field, Hernandez highlights the lasting effects of the COVID-19 pandemic and the rapid adoption of technology. Telehealth, in particular, emerges as a vital trend, offering efficient and cost-effective care for certain conditions.

“Key players in the health care field will be challenged to reevaluate how to protect the quality, safety, accessibility, efficiency and cost of health care through this new way of delivering care,” she said. “The increased use of and reliance on telehealth will likely result in new or updated state and federal regulations addressing, among other things, (1) which medical professions are permitted to provide telehealth services, under what circumstances and with what type of license (an in-state or out-of-state license); (2) whether and how medications can be prescribed; (3) whether and how public and private health insurers will reimburse for telehealth services; (4) how the government and health payers will monitor telehealth for potential fraudulent practices; and (5) how providers will need to comply with privacy, security and breach notification requirements to protect the use and sharing of patient information.”

In addition to leading Manatt’s health care litigation practice, she co-leads the firm’s health equity catalyst group and serves on the board of trustees of Mount Saint Mary’s University and Muse/ique, a nonprofit performing arts organization founded by community leaders in Pasadena to create avenues of access to classical and live music performances for everybody in the community. She also engages in pro bono work, assisting Spanish-speaking clients with asylum, adoption, guardianship and unlawful detainer matters.