HNT » Topics » If we are required to publicly disclose information regarding our reimbursement rates and preferred drug lists for our programs, it could have a material adverse effect on our business.

This excerpt taken from the HNT 10-Q filed May 9, 2008.

If we are required to publicly disclose information regarding our reimbursement rates and preferred drug lists for our programs, it could have a material adverse effect on our business.

In early 2008, we withdrew from the Connecticut Medicaid program following a decision by the Connecticut Freedom of Information Commission (the “CT FOIC”) that the Connecticut Department of Social Services (“DSS”) had to amend its existing contracts with managed care organizations participating in the Connecticut Medicaid program making them subject to the Connecticut Freedom of Information Act. This would have resulted in managed care companies participating in the Connecticut Medicaid program having to publicly disclose information regarding provider reimbursement rates and maintenance of preferred drug lists, which we believe is proprietary information. We recently learned that the State of Connecticut is considering extending the state’s Freedom of Information Act into non-Medicaid programs, such as programs for the uninsured and the State employee health benefits program.

If we are required to publicly disclose information regarding our reimbursement rates, preferred drug lists or other trade secret information as a result of the expansion of the scope of Connecticut freedom of information statutes, it could have a material adverse effect on our ability to contract with providers and compete effectively in the marketplace.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Purchases of Equity Securities by the Issuer

Our Board of Directors has authorized a stock repurchase program pursuant to which, as of March 31, 2008, we were authorized to repurchase up to $700 million of our common stock.

Under the Company’s various stock option and long term incentive plans, employees and non-employee directors may elect for the Company to withhold shares to satisfy minimum statutory federal, state and local tax withholding and exercise price obligations arising from the vesting and/or exercise of stock options and other equity awards. A description of the Company’s stock repurchase program and tabular disclosure of the information required under this Item 2 is contained in Part I – “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Structure—Share Repurchases.”

 

Item 3. Defaults Upon Senior Securities.

None.

 

Item 4. Submission of Matters to a Vote of Security Holders.

None.

 

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Item 5. Other Information.

None.

 

Item 6. Exhibits.

The following exhibits are filed as part of this Quarterly Report on Form 10-Q:

 

Exhibit

Number

  

Description

10.1    First Amendment to Credit Agreement dated as of April 29, 2008 by and among Health Net, Inc., Bank of America, N.A., as Administrative Agent and the other lenders party thereto.
10.2    First Amendment to Participation Agreement dated as of April 29, 2008 by and among Health Net, Inc., Health Net Funding, Inc., Lodgemore Holdings, Inc., ING Bank, N.V. and Health Net Financing, LP.
31.1    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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These excerpts taken from the HNT 10-K filed Feb 28, 2008.

If we are required to publicly disclose information regarding our reimbursement rates and preferred drug lists for our programs, it could have a material adverse effect on our business.

In 2006, a petition was submitted to the Connecticut Freedom of Information Commission (the “CT FOIC”) seeking, among other things, information regarding provider reimbursement rates and maintenance of preferred drug lists used by managed care organizations contracting with the Connecticut Department of Social Services in connection with the Connecticut Medicaid program. In response to the petition, the CT FOIC ruled that the Connecticut Department of Social Services (“DSS”) must furnish the information requested and had to amend its existing contracts with managed care organizations participating in the Connecticut Medicaid program making them subject to the Connecticut Freedom of Information Act. Health Net of Connecticut and two other managed care organizations appealed the CT FOIC decision to the Connecticut Superior Court, which upheld the CT FOIC’s decision. On February 11, 2008, we learned that the attorneys representing the appellees in this appeal notified the managed care companies that responded to DSS’s Request for Proposals with respect to Connecticut’s combined HUSKY A, SCHIP and Charter Oak Insurance Plan that they would all be subject to the broadest interpretation of the Connecticut Freedom of Information Act, and therefore, pursuant to a Freedom of Information Act request, would be required to disclose information concerning their commercial businesses, even in states other than Connecticut. Consumer activists in Connecticut therefore appear to be supporting the extension of the state’s Freedom of Information Act into non-Medicaid programs, such as those for the uninsured.

The situation in Connecticut, where an expansive reading of the state’s Freedom of Information Act is being adopted in state agencies, the Attorney General’s office, the legislature and the courts, poses the risk that similar expansive readings of state freedom of information statutes could spread to other states, particularly New York and New Jersey. If we are required to publicly disclose information regarding our reimbursement rates, preferred drug lists or other trade secret information as a result of the expansion of the scope of state freedom of information statutes, it could have a material adverse effect on our ability to contract with providers and compete effectively in the marketplace.

If we are required to publicly disclose information regarding our reimbursement rates and preferred
drug lists for our programs, it could have a material adverse effect on our business.

In 2006, a petition was submitted to the
Connecticut Freedom of Information Commission (the “CT FOIC”) seeking, among other things, information regarding provider reimbursement rates and maintenance of preferred drug lists used by managed care organizations contracting with the
Connecticut Department of Social Services in connection with the Connecticut Medicaid program. In response to the petition, the CT FOIC ruled that the Connecticut Department of Social Services (“DSS”) must furnish the information requested
and had to amend its existing contracts with managed care organizations participating in the Connecticut Medicaid program making them subject to the Connecticut Freedom of Information Act. Health Net of Connecticut and two other managed care
organizations appealed the CT FOIC decision to the Connecticut Superior Court, which upheld the CT FOIC’s decision. On February 11, 2008, we learned that the attorneys representing the appellees in this appeal notified the managed care
companies that responded to DSS’s Request for Proposals with respect to Connecticut’s combined HUSKY A, SCHIP and Charter Oak Insurance Plan that they would all be subject to the broadest interpretation of the Connecticut Freedom of
Information Act, and therefore, pursuant to a Freedom of Information Act request, would be required to disclose information concerning their commercial businesses, even in states other than Connecticut. Consumer activists in Connecticut therefore
appear to be supporting the extension of the state’s Freedom of Information Act into non-Medicaid programs, such as those for the uninsured.

SIZE="2">The situation in Connecticut, where an expansive reading of the state’s Freedom of Information Act is being adopted in state agencies, the Attorney General’s office, the legislature and the courts, poses the risk that similar
expansive readings of state freedom of information statutes could spread to other states, particularly New York and New Jersey. If we are required to publicly disclose information regarding our reimbursement rates, preferred drug lists or other
trade secret information as a result of the expansion of the scope of state freedom of information statutes, it could have a material adverse effect on our ability to contract with providers and compete effectively in the marketplace.

STYLE="margin-top:18px;margin-bottom:0px; text-indent:2%">Changes in the value of our investment assets could have a negative effect on our results of operations and stockholders’ equity.

Substantially all of our investment assets are in interest-yielding debt securities of varying maturities. The value of fixed-income
securities is highly sensitive to fluctuations in short-and long-term interest rates, with the value decreasing as such rates increase and increasing as such rates decrease. These securities may also be negatively impacted by illiquidity in the
market. The recent disruptions in the credit markets have negatively impacted the liquidity of investments, such as our debt securities, and a worsening of credit market disruptions or sustained market downturns could have additional negative
effects on the liquidity and value of our investment assets. In addition, our regulated subsidiaries are also subject to state laws and regulations that govern the types of investments that are allowable and admissible in those subsidiaries’
portfolios. There can be no assurance that our investment assets will produce total positive returns or that we will not sell investments at prices that are less than the carrying value of these investments. Changes in the value of our investment
assets, as a result of interest rate fluctuations, illiquidity or otherwise, could have a negative affect on our stockholders’ equity. In addition, if it became necessary for us to liquidate our investment portfolio on an accelerated basis, it
could have an adverse effect on our results of operations.

This excerpt taken from the HNT 10-K filed Mar 1, 2007.

If we are required to publicly disclose information regarding our reimbursement rates and preferred drug lists for our Connecticut Medicaid program, it could have a material adverse effect on our Connecticut Medicaid business.

 

In 2006, a petition was submitted to the Connecticut Freedom of Information Commission (the “CT FOIC”) seeking, among other things, information regarding provider reimbursement rates and maintenance of preferred drug lists used by managed care organizations contracting with the Connecticut Department of Social Services in connection with the Connecticut Medicaid program. In response to the petition, the CT FOIC ruled that the Connecticut Department of Social Services must furnish the information requested and had to amend its existing contracts with managed care organizations participating in the Connecticut Medicaid program making them subject to the Connecticut Freedom of Information Act. Health Net of Connecticut and two other managed care organizations appealed the CT FOIC decision to the Connecticut Superior Court, which upheld the CT FOIC’s decision. Health Net of Connecticut has appealed the court’s decision to the Connecticut Appellate Court. If Health Net of Connecticut loses this appeal and is required to publicly disclose information regarding its reimbursement rates and preferred drug lists, it could have a material adverse effect on Health Net of

 

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Connecticut’s ability to contract with providers in Connecticut and compete effectively in the Connecticut Medicaid program.

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