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
Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and per ...
, as well as commercial, small business, and affordable care insurance.
In July 2015, Centene announced it would acquire Health Net for $6.8 billion
and completed its acquisition in March 2016.
History
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
The California Department of Corporations (DOC) was a department within the former California Business, Transportation and Housing Agency in California. The chief officer of the Department was the Commissioner of Corporations. Effective July 1, 20 ...
' 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.
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 changed its name to Health Net, Inc. when the company started trading on the New York Stock Exchange under the symbol HNT.
In July 2009,
UnitedHealth Group
UnitedHealth Group Incorporated is an American multinational managed healthcare and insurance company based in Minnetonka, Minnesota. It offers health care products and insurance services. UnitedHealth Group is the world's seventh largest ...
bought Health Net's northeastern licensed subsidiaries for $510 million, and its Medicare and Medicaid businesses for $60 million. In November 2009,
Connecticut
Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York to the west, and Long Island Sound to the south. Its capita ...
's attorney general office investigated a lost, unencrypted hard drive with customer data.
Health Net offered two years of free credit protection from a company called Debix to affected customers.
In November 2010, the
Centers for Medicare and Medicaid Services (CMS) suspended Health Net for marketing and enrolling new members for compliance issues.
The sanctions were lifted in August 2011.
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. Health Net continued to providing prescription drug plans as part of its Medicare Advantage plans.
Mergers and Acquisitions
On July 2, 2015,
Centene Corporation announced it would acquire Health Net for $6.8 billion.
The acquisition was completed in March 2016 and combined headquarters were established in St. Louis, Missouri.
The acquisition resulted in Health Net Federal Services (HNFS) becoming a separate subsidiary of Centene.
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. Separately, in September 2019, Brian Ternan was appointed CEO of Health Net in California, leading operations in that state.
Legal Cases
In 2007, Patsy Bates, a California beautician, sued Health Net claiming that the company wrongfully terminated her care during chemotherapy treatments.
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.
Health Net claimed that Bates withheld health information, including a heart problem, that would have disqualified her from coverage.
Bates replied that the insurance broker had filled out the form for her.
In February 2008, the court ruled in Bates' favor and ordered Health Net to over $9 million in damages.
In 2008, Health Net agreed to pay $215M to settle allegations that it had unfairly reimbursed out-of-network providers between 1995 and 2007.
In September 2012, the Los Angeles County Medical Association and two patients sued Health Net for denying medically necessary treatment, including cancer care.
The lawsuit alleged that Health Net denied claims based on its own definition of "medical necessity" rather than standards set forth by California law.
A judge ruled in Health Net's favor in July 2013.
In 2016, Health Net Federal Services became a wholly-owned subsidiary of Centene, ending its time as a publicly traded company. 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.
See also
*
Top 100 US Federal Contractors
The Top 100 Contractors Report is a list developed annually by the U.S. General Services Administration as part of its tracking of U.S. federal government procurement, of the "Top 100" contractors in the United States.
In fiscal year 2005, the fe ...
References
External links
Health Net Federal Services website Rancho Cordova's Health Net division may see layoffsFebruary 23, 2008: Health Insurer Fined $9M for Dropping Calif. Breast Cancer Patient in Middle of Her Chemo
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Centene Corporation
Companies based in Los Angeles
Companies formerly listed on the New York Stock Exchange
Financial services companies established in 1977
Health care companies based in California
Health care companies established in 1977
Health insurance companies of the United States
Health maintenance organizations
2016 mergers and acquisitions