HEALTH NET WINS MILITARY CONTRACT.Byline: Evan Pondel Staff Writer WOODLAND HILLS - Health Net Inc. won a U.S. military contract Thursday expected to generate about $1.4 billion in annual revenue for up to five years. The deal calls for the managed-care company to provide coverage for approximately 1.7 million people who are enrolled in the Department of Defense's Tricare program. Health Net has provided Tricare coverage for 15 years. ``I think most people were expecting this outcome. It's certainly a positive for Health Net,'' said Matthew Borsch, an analyst with Goldman Sachs in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The military's health care system has consolidated its relationships with insurers by awarding three contracts instead of four this summer. The contracts cover three different geographic regions, including the North, South and East. Health Net, which bid for all the regions, was awarded the Northern region. Lisa Haines, a spokeswoman for Woodland Hills-based Health Net, said the military is important business for the company, which attributes roughly 14 percent of its annual revenue to the Department of Defense. ``Everyone's pretty excited around here. We've gone through months of speculation,'' Haines said. ``We are original pioneers of the program ... and it provides an important source of revenue for us.'' The Tricare program entitles Health Net to cover GIs who are in need of access to domestic health care when they are not on a military base or engaged in war abroad. Outside Health Net's realm, Tricare operates 75 military hospitals and medical centers, and 461 medical clinics worldwide. The program accounted for about 8.7 million beneficiaries in 2002, serving nearly 8 million active military members before September 2001. Humana is the largest provider for the U.S. military program, securing a $2.1 billion contract. Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. was awarded the third $2.1 billion contract. The new Health Net contract is effective immediately, allowing for at least a nine-month transition period. The company expects to begin health care delivery in July 2004. '`We are honored that the Department of Defense awarded us the North region (which includes Connecticut, Delaware, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). , New Jersey, New York, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Ohio, Pennsylvania, Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. , Vermont, Virginia, West Virginia and Wisconsin),'' Jay Gellert, president and chief executive officer of Health Net, said in a statement. ''We look forward to continuing ... services to the men and women of the armed services The Constitution authorizes Congress to raise, support, and regulate armed services for the national defense. The President of the United States is commander in chief of all the branches of the services and has ultimate control over most military matters. and their families.'' In the past, Tricare players have included Sierra Health Systems, a health maintenance organization based in Las Vegas and Aetna Inc. of Hartford, Conn. Tricare did not renew contracts with Aetna Inc. or Sierra Health Services health services Managed care The benefits covered under a health contract Inc. ``The new contracts are part of the secretary's transformation efforts and will make a strong program better,'' Dr. William Winkenwerder Jr., assistant secretary of defense for health affairs, said in a statement. ``I anticipate a smooth transition period.'' During that period, beneficiaries will receive information about enrollment choices, primary care manager selections and the availability of specialists. Health Net shares advanced 37 cents, or 1.18 percent, in after-hours trading after-hours trading The trading of securities after the exchanges are closed. After-hours trading often refers to trading a listed security in the over-the-counter market after the exchanges have been closed for the day. Thursday on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . Evan Pondel, (818) 713-3662 evan.pondel(at)dailynews.com |
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