Health Net to Receive Settlement from Federal Government
Health Net Inc. said it "expects" the federal government to provide $389 million in back health care claims from its Tricare program, a managed care plan for military personnel, the Wall Street Journal reports. Under the agreement, Health Net will see its receivables reduced for three Tricare contracts that "collectively cover beneficiaries in 11 states and account for $1.1 billion in annual revenue." The receivables accumulated "largely because health care costs rose faster than had been anticipated when the contracts were signed." Health Net President and CEO Jay Gellert said that $120 million to $130 million from the settlement would go to "vendors and other parties," while the rest will be used to "reduce debt." The company said it expects its 2001 per-share earnings to be between $1.55 and $1.58; Wall Street analysts have projected that figure to be $1.54 (Wall Street Journal, 1/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.