|Industry||Managed health care|
|Headquarters||Woodland Hills, Los Angeles, California|
|J. Brian Ternan (CEO)|
Number of employees
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.
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.
Health Net was established as the nonprofit Health Net of California in 1977 by Blue Cross. In 1992, a California order permitted the company to convert from a nonprofit to a for-profit company. 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.
In August 1993, Health Net merged with Qualmed to form Health Systems International. In April 1997, Health Systems International merged with Foundation Health Corporation to form Foundation Health Systems. Also in 1997, Foundation Health Systems acquired PACC Health Plans and Physicians Health Services.
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. In 2001, Health Net sold its Florida Health Plan business.
In July 2009, UnitedHealth Group bought Health Net's northeastern licensed subsidiaries for $510 million, and its Medicare and Medicaid businesses for $60 million. In 2009 and 2011, it was reported that servers containing customer information had been lost or stolen. The company was fined as a result, and in one instance offered free identity theft insurance to those affected.
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. Health Net would continue to provide prescription drug plans as part of its Medicare Advantage plan offerings.
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. The acquisition was completed in March 2016 and the combined headquarters were established in St. Louis, Missouri.
In 2018, Health Net in Arizona was merged into other Centene holdings to form Arizona Complete Health. The following year, in September 2019, J. Brian Ternan was appointed CEO of Health Net. In October, Health Net gave $75,000 in funding to California CareForce to support the free medical clinic.
Divisions and subsidiaries
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. In 2010, Health Net was awarded the TRICARE Managed Care Support contractor for the TRICARE North Region after a bidding dispute with Aetna. The division also partners with other health care providers to provide additional services, including those for veterans.
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 Silver Award Winner (Insurance Site)
- 2010 W3 Awards Silver Award Winner (Health & Wellness Mobile App)
- 2010 W3 Awards
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. 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.
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. Health Net Federal Services sponsors military-related sports-related events and veterans' sports clinics such as the National Veterans Golden Age Games in Honolulu 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.
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. 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.
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." The data on the drive was unencrypted and included information about financial, health, and personal information. It was discovered missing from the company's Connecticut office. 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.
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. 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.
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.
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.
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.
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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.
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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.
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