Health Net gets huge Medicaid monitoring contract.

HEALTH Net Federal Services (HNFS), a subsidiary of Health Net Inc., and the Texas Health and Human Service have entered into a partnership that will allow HNFS to provide cost recovery services for the state's Medicaid program, the nation's third largest program for the poor with more than 2.4 million recipients.

Under the agreement, HNFS will expand its existing Texas-based operations to review and recovery services under the product name Health Net Connections.

HNFS's recovery services aim to help the state identify coding, billing and processing errors for Medicaid hospital claims, for which the state now pays out roughly $1 billion annually.

Health Net has, for some time, provided the same service to the departments of Defense and Veterans Affairs.

HNFS recovery software programs not only allow the firm to identify and evaluate claims, they also provide the state resources to help eliminate future overpayments.

The two-year contract with Health Net calls for the program to begin in early 2004.

HNFS is the country's oldest administrator of managed care programs for military families and now serves more than 1.5 million eligible military dependents.

Health Net was also recently awarded the Managed Care Support contract for the TRICARE program for the U.S. Department of Defense's north region, which includes roughly 1.7 million members in 21 states and the District of Columbia.

The five-year contract is expected to produce roughly $1.4 billion in annual revenues for HNFS and delivery is expected to begin in July of 2004.

The TRICARE program provides medical coverage for active duty and retired uniformed service members and their dependants.

Boost for Natrol

Chatsworth-based Natrol Inc. has signed agreements with Minnesota-based Larex, Inc. to market that company's ImmuneEnhancer, a patented, non-herbal immune enhancement supplement.

Natrol's Essentially Pure Ingredients division has been awarded exclusive rights to market and sell the product. The announcement follows an August 18 announcement by Natrol of plans to sharpen its focus on product leadership and a significant restructuring of all of the company's operational units, which included moving the majority of its Connecticut-based sports fitness division Prolab to its Chatsworth headquarters.

Burbank Reorganization of Benefits

The Burbank Unified School District voted last month to discontinue existing health-care coverage by CalPERS for teachers, administrators and board members in favor of a less expensive program that aims to give raises and save the district roughly $1.5 million annually.

The Burbank Teachers Association (BTA), the union representing the district's roughly 800 teachers, nurses and counselors, agreed to nix their coverage by the California Public Employees Retirement System in return for a 1 percent annual increase in pay, the equivalent of about $450,000, according to BTA President Kim Allender.

The decision followed announcements by CalPERS that it was projecting significant increases in premiums over local alternatives.

The BTA, as well as the Burbank Association of School Administrators and the board of education all agreed on the changes, which will take effect Dec. 31.

The district is evaluating quotes from several insurance companies, including Health Net, PacifiCare and two other unidentified HMOs, according to board member Dave Kemp.

Providence Performs

HealthGrades, a leading provider of health care quality information, has awarded Providence St. Joseph and Holy Cross medical centers with five-star ratings for excellence in cardiac, neuroscience and obstetrics services.

The ratings put Burbank-based St. Joseph in the No. 1 slot in California and the top 5 percent category for excellence in stroke and cardiac care.

HealthGrades analyzes the quality of care at more than 5,000 hospitals across the country each year, with results based on patients' expectations of the care they are going to receive and the actual level of quality they experienced.

A hospital awarded a five-star designation generally scores among the top 15 percent in the nation for their category.

Holy Cross, based in Mission Hills, was also recently ranked one of the nation's top 50 hospitals for treating respiratory disorders in U.S. News & World Report and is the only hospital serving the San Fernando and Santa Clarita valleys to make the magazine's annual "America's Best Hospitals" list.

HMO Costs Scrutinized

According to HealthLeaders Research, an on-line publication for the industry, California HMOs remain dominant, but employers are beginning to balk at double-digit premium increase trends across the board and are looking for more flexible choices.

The publication predicts health insurers in the Valley, such as WellPoint Health Networks/Blue Shield of California, will be rolling out more programs over the next year to offer employers better ways to save and employees a wider array of benefit plans.

However, according to the publication, California's HMOs are by no means near extinction: It states that overall, HMOs' share of the commercial market in the state was 76 percent in January of 2003, up from 69 percent the year earlier.

Reporter Jacqueline Fox can be reached at [phone] or at [e-mail].