Health Net CEO Jay Gellert says that the company is strongly considering selling off its businesses in key states where it is not the market leader. Those states include New York, New Jersey, Connecticut and Arizona, which combined to generate $3.8 billion in annual revenue--or about 24 percent of the company's total revenue--for 2008, reports AMA News. Health Net membership in these states is nearly 540,000 or 25 percent of the company's customer base. Gellert recently told investors that the company should "liberate the capital" in these states and consolidate its businesses on the west coast where Health Net has a bigger share of the market. Gellert estimates that the sale of the New York, New Jersey, Connecticut and Arizona businesses could yield as much as $500 million. Crain's NY reports that EmblemHealth--parent of Group Health Inc. and HIP Health Plan of New York--is among a number of potential buyers.
Separately, Health Net of Northeast was ordered by the Connecticut Insurance Commission earlier this week to pay a $1.4 million in fines and restitution to consumers for not adequately reviewing patient records before denying or determining reimbursement fees on claims. Health Net was ordered to pay $496,000 in fines and $750,066 in restitution to Connecticut members whose claims were handled incorrectly, reports The Hartford Courant. The Insurance Commission also ordered the company to pay $60,000 to the state Insurance Department Education Account, a consumer protection fund used to educate consumers about insurance.