Health Net Federal Services to Offer Health Care Cost Recovery Services to Private, Public Health Care Sector.

Business Editors/Health/Medical Writers

RANCHO CORDOVA, Calif.--(BUSINESS WIRE)--July 16, 2003

Health Net(R) Federal Services (HNFS) today announced the launch of a new business venture, Health Net Connections, that will provide cost-recovery and cost-saving services to a wide range of both private and public health care payors.

HNFS is a long-standing contractor for the Department of Defense's TRICARE program. It provides health care coverage to more than 1.9 million active duty and retired uniformed services members and their families.

With the new venture, HNFS now offers effective cost-recovery services to the private health care sector, in addition to the services that have saved millions of dollars in government-funded programs. Health Net Connections is supported by a new Web site at www.hnconnections.com.

"For more than 13 years, Health Net Federal Services has provided valuable cost recovery services to the Department of Defense -- and, more recently, to the Department of Veterans Affairs on a national level," said James Woys, president of Health Net Federal Services. "It was a natural for us to develop and offer these same proven capabilities for other public entities and the private sector.

"We've seen first hand that cost-recovery services can save valuable health care dollars currently lost to fraud, abuse, waste and claims errors," added Woys. "We are excited about launching Health Net Connections -- and look forward to offering value-added services to new clients."

Health Net Connections has a distinct advantage in the health care cost recovery marketplace with its proven techniques for recovering and saving health care claims dollars, its use of sophisticated state-of-the-art software platforms, experienced recovery teams and low-cost start-up fees. It specializes in helping clients regain misappropriated health care dollars through the following services:

-- Anti Fraud and Abuse

The National Health Care Anti-Fraud Association (NHCAA) estimates that at least 3 percent of total claim expenditures are attributed to fraud and abuse, while the U.S. General Accounting Office's estimates are as high as 10 percent of all U.S. health care payments.

"We typically save our clients from 1 to 3 percent of their total claims expenditures -- savings that can add up to millions of dollars annually for each client," said Scott Kelly, senior vice president, Health Net Federal Services.

-- DRG Review and Recovery

Based on past experience, Health Net Connections estimates that 1 to 3 percent of DRG payments containing billing, processing or coding errors can be recovered.

"The Health Net Connections DRG claims review program is unique in the industry," said Kelly. "Our proprietary software evaluates more than 500 unique DRGs and identifies claims with the greatest potential for overpayment recovery. In addition to identifying and recovering funds, the program provides clients with suggestions to eliminate future overpayments."

Health Net Federal Services has provided post-payment DRG reviews for the federal government's TRICARE program for the past seven years. HNFS also performs DRG validation in support of the Department of Veterans Affairs National DRG Recovery Audit Program. HNFS has recouped tens of millions of dollars for both programs.

-- Preferred Pricing

The Health Net Connections Preferred Pricing Program helps health care payors reduce their costs by minimizing the amount paid for provider claims. Using discounted rates available from Health Net's vast nationwide PPO provider network, claims are priced and compared against the customer's allowable amount for the claim. The difference in the two amounts represents claims dollars saved.

For more information about Health Net Connections Fraud and Abuse Services, DRG Review and Recovery Services and Preferred Pricing Program, visit www.hnconnections.com.

About Health Net Federal Services

Health Net Federal Services (HNFS) is the Governmental Operations Division of Health Net, Inc. As one of the first companies in the United States to develop comprehensive managed care programs for military families, HNFS has a long history of providing cost containment and managed health care programs for governmental agencies. HNFS currently administers the TRICARE health care program for nearly 1.9 million military dependents in 11 states.

About Health Net, Inc.

Health Net, Inc. is one of the nation's largest publicly traded managed health care companies. Its mission is to help people be healthy, secure and comfortable. The company's HMO, insured PPO and government contracts subsidiaries provide health benefits to approximately 5.3 million individuals in 15 states through group, individual, Medicare, Medicaid and TRICARE programs. Health Net's subsidiaries also offer managed health care products related to behavioral health, dental, vision and prescription drugs, and offer managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs.

For more information on Health Net, Inc., please visit the company's Web site at www.health.net.