Health Net, Inc. (NYSE: HNT) is among the United States of America's largest publicly traded managed health care companies. The company’s HMO, POS, insured PPO and government contracts subsidiaries provide health benefits to approximately 6.6 million individuals in all 50 states and the District of Columbia through group, individual, Medicare, Medicaid and TRICARE and Veterans Affairs programs. Health Net’s behavioral health services subsidiary, MHN, provides behavioral health, substance abuse and employee assistance programs (EAPs) to approximately 7.3 million individuals in various states, including the company’s own health plan members. The company’s subsidiaries also offer managed health care products related to prescription drugs, and offer managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs.
Health Net's headquarters are located in Woodland Hills, California.
Divisions
Health Net Federal Services, Inc. (HNFS) is the government operations division of Health Net. It is the TRICARE North region provider as of July 1, 2004. Health Net's bid for the Tricare North region business contract, effective starting April 1st, 2010, was awarded to Aetna[1], however Aetna's contract has been suspended pending the outcome of Health Net's protest. On November 4, 2009 the GAO upheld Health Net's protest[2].
Since the 1980s, Health Net has been a sponsor of the March of Dimes' largest fund-raising event, March for Babies. In 2008, more than 300 Health Net associates walked in March for Babies events across California contributing more than $325,000 through various fund-raising efforts.
Quality of Care
In California's Health Care Quality Report Card 2009 Edition produced by California's Office of the Patient Advocate, HealthNet (CA) received 3 out of 4 scores in Meeting National Standards of Care, and How Members Rate Their HMO.
Controversy
In 2007, Patsy Bates, a California beautician, sued Health Net claiming that they wrongfully terminated her care in the middle of her chemotherapy treatments. Internal company documents made public during the law suit revealed that the company had tied bonuses to dropping coverage in order to encourage its analysts in charge of recission reviews to discover reasons (such as application fraud) to discontinue coverage to clients who the company deems will cost them money. The company pointed out that Bates had withheld critical information - that she had damaged her heart by the use of fen-phen for diet purposes and stated an inaccurate weight; Bates replied that the insurance broker had filled out the form for her and she had been busy in her salon. [3] In February 2008 the court ruled in favor of Bates, ordering Health Net to pay $8.4 million in punitive damages and $750,000 for emotional distress. [4]
Health Net considers asset, stock sale
Health Net could offload its business in Arizona and the Northeast after a disappointing 2008, said Jay Gellert, president and chief executive officer of the Woodland Hills, Calif.-based insurer.
Health Net is exploring an asset sale, stock sale or partnership for those markets before the end of the first quarter, Gellert said at the J.P. Morgan Healthcare Conference in San Francisco. Health Net wants to recoup $500 million in risk-based capital investment required to operate in those regions by the end of 2009, taking into consideration regulatory approvals. Combined revenues for those two regions is estimated at between $3.7 billion and $3.8 billion for 2009, he said.
“Our scale is not enough to support those markets,” Gellert said.
Healthcare unit costs in Arizona and the Northeast are about 5% higher than the median of the competition, he said. Health Net has about 700,000 members total in those regions.
The company would like to focus on its health-plan offerings in California and Oregon, as well as its TriCare and Medicare contracts, Gellert said.
Health Net’s board of directors shuffled executive duties last fall amid disappointing financial performance because of mispriced Medicare Advantage and Part D products and higher-than-expected medical costs. Gellert’s focus is on strategy while James Woys, executive vice president and chief operating officer, is overseeing operational matters, according to the company.
“We had a rough ’08,” Gellert said. “I think everyone is aware of that.”
References
External links
Rancho Cordova's Health Net division may see layoffs
Health insurer tied bonuses to dropping sick policyholders
February 23, 2008: Health Insurer Fined $9M for Dropping Calif. Breast Cancer Patient in Middle of Her Chemo
