| Type | Public (NYSE: HNT) |
|---|---|
| Industry | Health Insurance |
| Headquarters | Woodland Hills, Los Angeles, California |
| Key people | Jay Gellert (CEO) |
| Employees | 9,300 |
| Website | healthnet.com |
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.
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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.
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]
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]
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.
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]
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. [11]
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. [12]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. [13]
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