Health Net

From Wikipedia, the free encyclopedia
Health Net, Inc.
IndustryManaged health care
HeadquartersWoodland Hills, Los Angeles, California
Key people
J. Brian Ternan (CEO)
ProductsHealth insurance
Number of employees

Health Net, LLC, a subsidiary of Centene Corporation, is an American health care insurance provider. Health Net and its subsidiaries provide health plans for individuals, families, businesses and people with Medicare and Medicaid, as well as commercial, small business, and affordable care insurance.[1] [2]

In July 2015, Centene announced it would acquire Health Net for $6.8 billion[3] and completed its acquisition in March 2016.[4]


Health Net was established as the nonprofit Health Net of California in 1977 by Blue Cross.[5] In 1992, a California order permitted the company to convert from a nonprofit to a for-profit company.[6] Under the terms of the California Department of Corporations' conversion order, 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.[6]

In August 1993, Health Net merged with Qualmed to form Health Systems International.[7][8] In April 1997, Health Systems International merged with Foundation Health Corporation to form Foundation Health Systems.[9] Also in 1997, Foundation Health Systems acquired PACC Health Plans and Physicians Health Services.[9][10]

In November 2000, Foundation Health Systems changed its name to Health Net, Inc. when the company started trading on the New York Stock Exchange under the symbol HNT.[11]

In July 2009, UnitedHealth Group bought Health Net's northeastern licensed subsidiaries for $510 million, and its Medicare and Medicaid businesses for $60 million.[12] In November 2009, Connecticut's attorney general office investigated a lost, unencrypted hard drive with customer data.[13] Health Net offered two years of free credit protection from a company called Debix to affected customers.[13]

In November 2010, the Centers for Medicare and Medicaid Services (CMS) suspended Health Net for marketing and enrolling new members for compliance issues.[14] The sanctions were lifted in August 2011.[14] In January 2012, the company agreed to sell its Medicare Prescription Drug Plan (PDP) business to CVS Caremark Corp. (CVS) for approximately $160 million in cash.[15][16] Health Net continued to providing prescription drug plans as part of its Medicare Advantage plans.[17]

Mergers and Acquisitions[edit]

On July 2, 2015, Centene Corporation announced it would acquire Health Net for $6.8 billion.[3] The acquisition was completed in March 2016 and combined headquarters were established in St. Louis, Missouri.[3][4] The acquisition resulted in Health Net Federal Services (HNFS) becoming a separate subsidiary of Centene.[18][19]

In 2018, Health Net in Arizona was merged into other Centene holdings to form Arizona Complete Health, and Martha Smith was named as its Plan President and CEO.[20][21] Separately, in September 2019, Brian Ternan was appointed CEO of Health Net in California, leading operations in that state.[22]

Legal Cases[edit]

In 2007, Patsy Bates, a California beautician, sued Health Net claiming that the company wrongfully terminated her care during chemotherapy treatments.[23] During the case, a company employee performance review revealed that a manager had tied bonuses for an analyst in charge of rescission reviews to the rate of enrollees whose coverage was discontinued.[23] Health Net claimed that Bates withheld health information, including a heart problem, that would have disqualified her from coverage.[23] Bates replied that the insurance broker had filled out the form for her.[23] In February 2008, the court ruled in Bates' favor and ordered Health Net to over $9 million in damages.[24]

In 2008, Health Net agreed to pay $215M to settle allegations that it had unfairly reimbursed out-of-network providers between 1995 and 2007.[25]

In September 2012, the Los Angeles County Medical Association and two patients sued Health Net for denying medically necessary treatment, including cancer care.[26] The lawsuit alleged that Health Net denied claims based on its own definition of "medical necessity" rather than standards set forth by California law.[26] A judge ruled in Health Net's favor in July 2013.[27]

In 2016, Health Net Federal Services became a wholly-owned subsidiary of Centene, ending its time as a publicly traded company.[28] In 2021, Health Net's former subsidiary, Health Net Federal Services, agreed to pay $97M to settle allegations that it had duplicated or inflated claims submitted to the Department of Veterans Affairs between 2013 and 2019.[29]

See also[edit]


  1. ^ Beck, Melinda (2010-03-09). "When Anger Is An Illness". The Wall Street Journal. ISSN 0099-9660. Retrieved 2021-09-20.
  2. ^ Japsen, Bruce. "Centene's $6.3B Health Net Deal Shows Medicaid Plans Quick To Diversify". Forbes. Retrieved 2022-07-13.
  3. ^ a b c 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.
  4. ^ a b Liss, Samantha (24 March 2016). "Centene completes Health Net deal". St. Louis Post Dispatch. Retrieved 2020-11-18.
  5. ^ Stassel, Stephanie (28 September 1991). "Paul Wilson; Sunkist Executive, Founding Chairman of Health Net". Los Angeles Times. Retrieved 2020-11-18.
  6. ^ a b 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". Los Angeles Times. Retrieved December 10, 2017.
  7. ^ 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.
  8. ^ 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.
  9. ^ a b "Foundation Health Will Buy Physicians Health, as Expected". Wall Street Journal. 1997-05-09. ISSN 0099-9660. Retrieved 2020-11-18.
  10. ^ Brock, Kathy (13 April 1997). "Health care giant swallows PACC". Portland Business Journal.
  11. ^ "Foundation Health Systems Now Known as Health Net". Los Angeles Times. 21 November 2000. Retrieved 10 December 2017.
  12. ^ Bordonaro, Greg (4 December 2009). "State approves UnitedHealthcare, Health Net Merger". Hartford Business Journal. Archived from the original on 2013-02-16. Retrieved 2013-02-01.
  13. ^ a b Mearian, Lucas (2009-11-19). "Health Net says 1.5M medical records lost in data breach". Computerworld. Retrieved 2020-11-18.
  14. ^ a b "Update 1-Health Net says CMS lifts sanctions on Medicare programs". Reuters. 2011-08-02. Retrieved 2021-09-20.
  15. ^ "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.
  16. ^ Crowe, Deborah (9 January 2012). "Health Net Sells Medicare Drug Plan for $160 Million". Los Angeles Business Journal. Retrieved 2020-11-18.
  17. ^ "Health Net sells Medicare drug plan business to CVS Caremark for $160M". Healthcare Finance News. 10 January 2012. Retrieved 2020-11-18.
  18. ^ Robertson, Kathy (10 November 2016). "Exclusive: Health Net gets new $17.7 billion military health care contract". Retrieved 2021-09-20.{{cite web}}: CS1 maint: url-status (link)
  19. ^ Sauter, Michael; Stebbins, Samuel. "These 30 companies, including Boeing, get the most money from the federal government". USA Today. Retrieved 2021-09-20.{{cite web}}: CS1 maint: url-status (link)
  20. ^ "Health Net name disappearing in Arizona". Phoenix Business Journal. Retrieved 2019-06-21.
  21. ^ "Investments in telehealth solutions in Arizona address the need for members to continue essential care". Retrieved 2022-07-13.
  22. ^ 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.
  23. ^ a b c d Girion, Lisa (November 9, 2007). "Health Insurer Tied Bonuses to Dropping Sick Policyholders". Los Angeles Times. Retrieved 2013-09-13.
  24. ^ "Canceled Cancer Patient Awarded $9 Million". Retrieved 2021-09-20.
  25. ^ "Health Net inks $215M settlement on payment allegations". Fierce Healthcare. 2008-07-25. Retrieved 2022-02-23.
  26. ^ a b "Health Net faces suit over refusals to cover treatments". Los Angeles Times. 2012-09-13. Retrieved 2021-09-20.{{cite web}}: CS1 maint: url-status (link)
  27. ^ "Health Net's 'Medical Necessity' Definition OK'd By Judge - Law360". Retrieved 2021-09-20.
  28. ^ "CA insurer Health Net pays $97M to settle VA billing probe". {{cite web}}: Check |archive-url= value (help)
  29. ^ "Health Net Federal Services Pays over $97M for Overstated Billings to the VA". 2021-04-06. Retrieved 2022-02-23.

External links[edit]