Health Net

Health Net, LLC, a Centene company, is an American health care insurance provider. 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. HMO, POS, insured PPO, and government contracts subsidiaries provide health benefits to approximately 5.9 million individuals in all 50 states and the District of Columbia through group, individual, Medicare, Medicaid, Tricare, and Veterans Affairs programs.[1]

Health Net, Inc.
TypeSubsidiary
IndustryManaged health care
HeadquartersWoodland Hills, Los Angeles, California
Key people
J. Brian Ternan (CEO)
ProductsHealth insurance
Number of employees
3,000
ParentCentene
Websitehealthnet.com

In July 2015, Centene announced its intention to acquire Health Net for $6.8 billion. St. Louis-based Centene completed its acquisition of Health Net in March 2016.[2]

Health Net's dual headquarters are located in St. Louis, Missouri and Woodland Hills, Los Angeles, California.

History

Health Net was established as the nonprofit Health Net of California in 1977 by Blue Cross.[3] In 1992, a California order permitted the company to convert from a nonprofit to a for-profit company.[4] Under the terms of the California Department of Corporations' conversion order approving Health Net's for-profit status, the California Wellness Foundation, the successor charity to its nonprofit status, received $300 million plus 80 percent of the equity of Health Net's parent holding company.[4]

In August 1993, Health Net merged with Qualmed to form Health Systems International.[5][6] In April 1997, Health Systems International merged with Foundation Health Corporation to form Foundation Health Systems.[7] Also in 1997, Foundation Health Systems acquired PACC Health Plans and Physicians Health Services.[7][8]

In November 2000, Foundation Health Systems officially changed its name to Health Net, Inc. when the company started trading on the New York Stock under the symbol HNT.[9] In 2001, Health Net sold its Florida Health Plan business.[10]

In July 2009, UnitedHealth Group bought Health Net's northeastern licensed subsidiaries for $510 million, and its Medicare and Medicaid businesses for $60 million.[11] In 2009 and 2011, it was reported that servers containing customer information had been lost or stolen.[12][13][14] The company was fined as a result, and in one instance offered free identity theft insurance to those affected.[15][16]

In January 2012, the company agreed to sell its Medicare Prescription Drug Plan (PDP) business to CVS Caremark Corp. (CVS) for about $160 million in cash.[17][18] Health Net would continue to provide prescription drug plans as part of its Medicare Advantage plan offerings.[19]

Post Centene merger

On July 2, 2015, Centene Corporation announced it would acquire Health Net for $6.8 billion. Upon completion, Health Net shareholders would own 29% of the combined company.[20] The acquisition was completed in March 2016 and the combined headquarters were established in St. Louis, Missouri.[20][21]

In 2018, Health Net in Arizona was merged into other Centene holdings to form Arizona Complete Health.[22] The following year, in September 2019, J. Brian Ternan was appointed CEO of Health Net.[23] In October, Health Net gave $75,000 in funding to California CareForce to support the free medical clinic.[24]

Divisions and subsidiaries

Health Net insurance Health Net offers managed health care benefits to people through individual and employer health plans and government programs, such as Medicare and Medicaid.[20][25]

Health Net Federal Services, Inc. (HNFS) is the government operations division of Health Net. HNFS owns and supports health care service providers such as TRICARE, a health care program for active duty and retired military and their families.[26] In 2010, Health Net was awarded the TRICARE Managed Care Support contractor for the TRICARE North Region after a bidding dispute with Aetna.[27][28] The division also partners with other health care providers to provide additional services, including those for veterans.[25]

Managed Health Network, Inc. is a subsidiary that offers Employee assistance program (EAPs).

Awards and recognitions
  • 2018 Health Net earned 4 of 5 stars from the Center for Medicare and Medicaid Services in their annual star rating report
  • 2018 Health Net earned Prestigious Commendable Accreditation Status from the National Committee for Quality Assurance (NCQA)
  • 2017 Health Net Federal Services earned the Health Accreditation from Utilization Review Accreditation Commission (URAC)
  • 2010 Healthnet.com and the newly launched Health Net Mobile app received numerous Awards: Official Honoree (Insurance Category)
  • 2010 Webby Award[29] Silver Award Winner (Insurance Site)
  • 2010 W3 Awards[30] Silver Award Winner (Health & Wellness Mobile App)
  • 2010 W3 Awards[30]

Sponsorships and philanthropy

Health Net Foundation

The Health Net Foundation was created in 2007 as the philanthropic arm of Health Net. It makes charitable contributions to organizations that promote wellness and preventive care, combat childhood obesity and support health programs for military families in communities where Health Net does business. Health Net launched its Foundation in September 2007 by providing a Three-Year $1.35 Million Grant to the American Heart Association.[31] The Health Net Foundation has provided other grants such as the $175,000 given to twelve California school-based health centers and community medical clinics to improve dental care and oral health.[32]

Other sponsorships

In addition to its Foundation, Health Net Federal Services has also participated in philanthropic causes. The division established a scholarship to be administered through National Military Family Association (NMFA) designating $150,000 to be awarded to military spouses in the TRICARE North Region.[33] Health Net Federal Services sponsors military-related sports-related events and veterans' sports clinics such as the National Veterans Golden Age Games in Honolulu[34] and the Veterans Wheelchair Games.

Since the 1980s, Health Net has been a sponsor of the March of Dimes' largest fundraising 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.

For a number of years, Health Net sponsored the Health Net Pro Cycling Team, which now is sponsored by UnitedHealth Group. Health Net Pro Cycling Team Presented by Maxxis was run by Momentum Sports Group and based in the United States. Health Net won the team title in the 2004, 2005, 2006 and 2007 USA Cycling National Racing Calendar series competitions.

Quality of care

In California's Health Care Quality Report Card 2011 Edition by California's Office of the Patient Advocate, Health Net (CA) received 2 out of 4 stars in Meeting National Standards of Care.[35]

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. An internal company employee performance review made public during the lawsuit revealed that one of the company's managers had tied bonuses to the rescission rate for one analyst in charge of rescission reviews to discover reasons (such as application fraud) to discontinue coverage to enrollees. 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.[36] 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.[37]

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."[38][39] The data on the drive was unencrypted and included information about financial, health, and personal information.[39] It was discovered missing from the company's Connecticut office.[39] 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.[40] 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.[41]

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.[42]

Los Angeles County Medical Association lawsuit

On September 13, 2012, the Los Angeles County Medical Association joined two patients in suing Health Net for illegally denying medically necessary treatment, including cancer care. The lawsuit alleges that Health Net routinely and systematically denies claims based on its own definition of "medical necessity", violating well-established standards set forth by California law. According to the suit, Health Net is "the leader" in this calculated corporate practice to avoid paying claims.[43]

Memorandum of Department of Veterans Affairs Inspector General

In September 2017, VA Inspector General Michael Missal issued a memorandum that listed four major “errors” that had resulted in excess payments to Health Net. These were:

  • Duplicate Errors–Payments for medical claims that have been paid more than once;
  • Other Health Insurance8 (OHI) Errors–Payments that were not adjusted for the amount OHI was responsible to pay the provider;
  • Pass-Through Errors–Payments to reimburse the third-party administrator (TPA) that were more than the TPA paid the provider and;
  • Rate Errors–Payments that did not use the appropriate Medicare or contract adjusted rate

Missal stated that duplicate payments alone accumulated over $50 million in overpayments to Health Net.[44]

See also

References
  1. "Investor Information - Corporate Profile". investor.health.net. Retrieved 10 December 2017.
  2. "Centene Completes Acquisition Of Health Net". InsuranceNewsNet. 24 March 2016.
  3. Stassel, Stephanie (28 September 1991). "Paul Wilson; Sunkist Executive, Founding Chairman of Health Net". Los Angeles Times. Retrieved 2020-11-18.
  4. Peltz, James F. (February 8, 1992). "Health Net Wins For-Profit Status : * Medicine: The state lets the Woodland Hills-based HMO convert from a nonprofit organization after it agrees to cede majority ownership to a foundation". Retrieved December 10, 2017.
  5. Lee, Don (31 August 1993). "Rivals Health Net, QualMed Agree to Merge : Health care: The strategic alliance would give the two HMOs a combined 1.2 million customers in six Western states". Los Angeles Times. Retrieved 2020-11-18.
  6. Freudenheim, Milt (1995-03-28). "COMPANY NEWS; 2 California Health Care Providers Agree to a $1.8 Billion Merger (Published 1995)". The New York Times. ISSN 0362-4331. Retrieved 2020-11-18.
  7. "Foundation Health Will Buy Physicians Health, as Expected". Wall Street Journal. 1997-05-09. ISSN 0099-9660. Retrieved 2020-11-18.
  8. Brock, Kathy (13 April 1997). "Health care giant swallows PACC". Portland Business Journal.
  9. "Foundation Health Systems Now Known as Health Net". 21 November 2000. Retrieved 10 December 2017 – via LA Times.
  10. Hirahara, Naomi; Smith, Henrietta (2003). Distinguished Asian American Business Leaders. Greenwood Press. p. 191. ISBN 9781573563444.
  11. Bordonaro, Greg (4 December 2009). "State approves UnitedHealthcare, Health Net Merger". Archived from the original on 2013-02-16. Retrieved 2013-02-01.
  12. Helfand, Duke (2011-03-16). "Health Net Faces Second Probe Over Loss of Personal Data". The Los Angeles Times. Retrieved 2013-09-13.
  13. Mearian, Lucas (2009-11-19). "Health Net says 1.5M medical records lost in data breach". Computerworld. Retrieved 2020-11-18.
  14. Zetter, Kim (19 November 2009). "Health Insurer Loses 1.5 Million Patient Records". Wired. ISSN 1059-1028. Retrieved 2020-11-18.
  15. Sturdevant, Matthew (14 March 2011). "Health Net Security Breach Affects Nearly 25,000 Connecticut Residents". Hartford Courant. Retrieved 2020-11-18.
  16. Vijayan, Jaikumar (2011-03-15). "Health Net discloses loss of data to 1.9 million customers". Computerworld. Retrieved 2020-11-18.
  17. "Health Net (HNT) Announces Plans to sell Stand-Alone Prescription Plan Business to CVS Caremark (CVS) for ~$160M". 9 January 2012. Archived from the original on 2019-07-23. Retrieved 2020-01-11.
  18. Crowe, Deborah (9 January 2012). "Health Net Sells Medicare Drug Plan for $160 Million | Los Angeles Business Journal". Los Angeles Business Journal. Retrieved 2020-11-18.
  19. "Health Net sells Medicare drug plan business to CVS Caremark for $160M". Healthcare Finance News. 10 January 2012. Retrieved 2020-11-18.
  20. Bray, Chad (2015-07-02). "Centene to Acquire Its Managed Care Rival Health Net for $6.8 Billion (Published 2015)". The New York Times. ISSN 0362-4331. Retrieved 2020-11-18.
  21. Liss, Samantha (24 March 2016). "Centene completes Health Net deal". St. Louis Post Dispatch. Retrieved 2020-11-18.
  22. "Health Net name disappearing in Arizona". Phoenix Business Journal. Retrieved 2019-06-21.
  23. Russell, John (30 January 2020). "Anthem sues senior executive who took job with competitor, demands return of $4M". Indianapolis Business Journal. Retrieved 2020-11-18.
  24. Anderson, Cathie (10 October 2019). "Health Net funding allows gigantic, free health clinic to proceed in Sacramento". The Sacramento Bee.
  25. Terhune, Chad (5 November 2017). "Insurers make billions off Medicaid in California during Obamacare expansion". Los Angeles Times. Retrieved 2020-11-18.
  26. "Tough returns to Health Net". Sacramento Business Journal. 30 January 2006.
  27. "UPDATE: Health Net Loss Of Tricare Pact Fans M&A Speculation". July 14, 2009. Archived from the original on 2009-07-17. Retrieved 2013-09-13.
  28. Vesley, Rebecca (6 May 2010). "Disputed Tricare contract goes to Health Net". Modern Healthcare. Retrieved 2020-11-18.
  29. "Archived copy". Archived from the original on 2009-10-01. Retrieved 2012-12-22.CS1 maint: archived copy as title (link)
  30. "W³ Awards - Winners List". www.w3award.com. Retrieved 10 December 2017.
  33. "Page Not Found". www.hnfs.com. Archived from the original on 31 January 2013. Retrieved 10 December 2017. Cite uses generic title (help)
  34. "Health Net Sponsors the 25th National Veterans Golden Age Games in Honolulu" (PDF). www.businesswire.com. May 23, 2011. Retrieved 2019-06-04.
  35. "Archived copy" (PDF). Archived from the original (PDF) on 2012-07-23. Retrieved 2016-02-06.CS1 maint: archived copy as title (link)
  36. Girion, Lisa (November 9, 2007). "Health Insurer Tied Bonuses to Dropping Sick Policyholders". Los Angeles Times. Retrieved 2013-09-13.
  37. "Insurer Fined $9M for Dropping Calif. Breast Cancer Patient in Middle of Her Chemo". Associated Press. Archived from the original on 2008-02-26. Retrieved 2008-02-23.
  38. "Health Net Missing Data From 450K Customers–Insurer Failed To Inform Customers For Six Months". Eyewitness News. November 18, 2009. 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.
  39. "Conn. Health Insurer Acknowledges Missing Data". CBS News. Nov 18, 2009. Archived from the original on March 13, 2014. 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.
  40. "Medicare Imposes Marketing and Enrollment Suspension on Three Health and Drug Sponsors". Retrieved 2010-11-24.
  41. "Health Net Statement Regarding CMS Actions". Business Wire. Retrieved 2010-11-24.
  42. "UPDATE: Health Net To Sell A Medicare Prescription Unit To CVS". The Wall Street Journal, WSJ.com. Retrieved 2012-01-10.
  43. "LA Doctors, patients sue Health Net for Denying Claims". Reuters. September 13, 2012. Retrieved 2013-09-13.
  44. "Report" (PDF). www.va.gov. Retrieved 2019-06-04.
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