Health Net, Inc. (NYSE: HNT) is among the United States of America's largest publicly traded health insurers. 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, Los Angeles, 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 1, 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] On May 13, 2010 Health Net Federal Services was formally awarded the contract as the TRICARE Managed Care Support (MCS) contractor for the TRICARE North Region by the Department of Defense (DoD).[3] The announcement followed the May 5, 2010 news of the DoD's intent to award.
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 2011 Edition by California's Office of the Patient Advocate, HealthNet (CA) received 2 out of 4 stars in Meeting National Standards of Care.[4]
Controversies
Patsy Bates lawsuit
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.[5] 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.[6]
Connecticut attorney general investigation
In November 2009, Connecticut attorney general Richard Blumenthal said Health Net lost the personal information of nearly 450,000 state residents and "failed to inform consumers for six months."[7][8] The data on the drive was unencrypted and included information about financial, health, and personal information.[8] It was discovered missing from the company's Connecticut office.[8] Health Net circulated a letter to customers in December 2009, including an offer of free credit protection from a company called Debix for two years.
CMS Suspension
On November 19, 2010, the Centers for Medicare and Medicaid Services (CMS) immediately suspended Health Net because the insurer improperly administered the Medicare drug benefit in contracts for its national prescription drug plan and local Medicare Advantage prescription drug plans. [9] The suspension required Health Net to cease marketing and enrollment of new members of all Health Net Medicare Advantage Prescription Drug (MAPD) and stand-alone Prescription Drug Plan (Part D) contracts, effective November 20, 2010. The sanctions relate to compliance with certain Part D requirements. The suspension did not affect existing Health Net Medicare enrollees. [10]
Although the company was allowed to resume marketing its Medicare products in August 2011, on January 6, 2012, the company agreed to sell its Medicare stand-alone Prescription Drug Plan (PDP) business to CVS Caremark Corp. (CVS) for about $160 million in cash. Health Net would continue to provide prescription drug plans as part of its Medicare Advantage plan offerings. [11]
Network data breach
On March 14, 2011 Health Net disclosed that nine server drives, containing personal information of 1.9 million members and providers, went missing from its Rancho Cordova (CA) data center. The insurer found out about the security lapse on January 21 when IBM, which manages the company's IT infrastructure, informed Health Net it was unable to locate the missing server drives. [12]
Health Net's missing computer records represent the largest data breech reported to the Office for Civil Rights (OCR) website and the third largest medical information breach in the Privacy Rights Clearinghouse database. [13]The data breech effects roughly 1.9 million people including 845,000 Californians, 100,000 Oregonians, 3,500 Vermonters and thousands more in other states.
The company offered two years free credit monitoring along with identity theft insurance to those affected. The Californian Department of Managed Health Care and the Department of Insurance have announced separate investigations into the breach. [14]
See also
References
- ^ . http://online.wsj.com/article/BT-CO-20090714-710183.html. [dead link]
- ^ http://investor.health.net/phoenix.zhtml?c=70296&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NjU4Mzk0MSZhdHRhY2g9T04mc1hCUkw9MQ%3d%3d
- ^ http://www.tricare.mil/mediacenter/news.aspx?fid=628
- ^ http://www.opa.ca.gov/about/consumer_information/files/pdf/OPA%20Booklet_2011.pdf
- ^ [t "Health Insurer Tied Bonuses to Dropping Sick Policyholders."]. LA Times. t. Retrieved 2007-11-11.
- ^ "Insurer Fined $9M for Dropping Calif. Breast Cancer Patient in Middle of Her Chemo". AP. Archived from the original on 2008-02-26. http://web.archive.org/web/20080226070222/http://www.rawstory.com/news/mochila/Insurer_that_cut_client_s_care_fine_02232008.html. Retrieved 2008-02-23.
- ^ "Health Net Missing Data From 450K Customers–Insurer Failed To Inform Customers For Six Months". Eyewitness News. November 18, 2009. http://www.wfsb.com/news/21654751/detail.html. Retrieved 2009-12-07. "Attorney General Richard Blumenthal says health insurer Health Net lost financial, health and personal information of nearly 450,000 state residents and failed to inform consumers for six months. Health Net spokeswoman Alice Ferreira in Shelton said in a statement that an unencrypted portable disk drive was discovered missing from the company's Connecticut office. She said that because of the nature of the files saved on the drive, the company was initially unable to determine what information was on it."
- ^ a b c "Conn. Health Insurer Acknowledges Missing Data". CBS News. Nov. 18, 2009. http://www.cbsnews.com/stories/2009/11/18/ap/business/main5700888.shtml. Retrieved 2009-12-07. "Connecticut Attorney General Richard Blumenthal said Wednesday that health insurer Health Net lost financial, health and personal information of nearly 450,000 state residents and failed to inform consumers for six months." [dead link]
- ^ "Medicare Imposes Marketing and Enrollment Suspension on Three Health and Drug Sponsors". Archived from the original on 2010-11-24. https://www.cms.gov/apps/media/press/release.asp?Counter=3878&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date. Retrieved 2010-11-24.
- ^ "Health Net Statement Regarding CMS Actions". Business Wire. Archived from [http http://www.businesswire.com/news/home/20101119006346/en/Health-Net-Statement-CMS-Actions the original] on 2010-11-24. http://www.businesswire.com/news/home/20101119006346/en/Health-Net-Statement-CMS-Actions. Retrieved 2010-11-24.
- ^ "UPDATE: Health Net To Sell A Medicare Prescription Unit To CVS". The Wall Street Journal, WSJ.com. Archived from the original on 2012-01-10. http://online.wsj.com/article/BT-CO-20120109-710513.html. Retrieved 2012-01-10.
- ^ Helfand, Duke (2011-03-16). "Health Net Faces Second Probe Over Loss of Personal Data". "The Los Angeles Times". http://articles.latimes.com/2011/mar/16/business/la-fi-0316-health-net-records-20110316. Retrieved 2011-04-19.
- ^ "Health Net Breach Tops Federal List". "GovInfoSecurity.com. http://www.govinfosecurity.com/articles.php?art_id=3509. Retrieved 2011-04-19.
- ^ "Health Net, Inc. Investigating Unaccounted-for Server Drives". "Health Net Investor Relations". http://healthnet.tekgroup.com/article_display.cfm?article_id=5529. Retrieved 2011-04-19.
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
