Health Net 2011 Annual Report Download - page 10

pharmacy distribution networks (directly and indirectly through a third party vendor), oversees pharmacy claims
and administration, reviews and evaluates new FDA-approved drugs for safety and efficacy and manages data
collection efforts to facilitate our health plans’ disease management programs. In addition, HNPS provides
affiliated and unaffiliated health plans various services including development of benefit designs, cost and trend
management, sales and marketing support and management delivery systems. HNPS outsources certain capital
and labor-intensive functions of pharmacy benefit management, such as claims processing, mail order services
and pharmacy network services.
Behavioral Health
We administer and arrange for behavioral health benefits and services through our subsidiary, Managed
Health Network, Inc., and its subsidiaries (collectively “MHN”). MHN offers behavioral health, substance abuse
and employee assistance programs (“EAPs”) on an insured and self-funded basis to groups in various states, and
these programs and services are included as a standard part of most of our commercial health plans. MHN’s
benefits and services are also sold in conjunction with other commercial and Medicare products and on a stand-
alone basis to unaffiliated health plans and employer groups. In 2011, MHN continued to implement, administer
and monitor the non-medical counseling program for the Department of Defense under the Military Family and
Life Consultant program. See “—Government Contracts Segment—Other Department of Defense Contracts” for
a description of this contract. MHN also holds contracts with the U.S. Department of State (“State Department”)
and the U.S. Agency for International Development (“USAID”) to provide EAP counseling services tailored for
State Department and USAID employees and family members while posted overseas.
MHN’s products and services were provided to approximately 5.0 million individuals as of December 31,
2011, with approximately 134,000 individuals under risk-based programs, approximately 1.8 million individuals
under self-funded programs and approximately 3.1 million individuals under EAPs, including those who are also
covered under other MHN programs. In 2011, MHN’s total revenues were $341.6 million. Of that amount, $39.8
million represented revenues from business with MHN affiliates and $301.8 million represented revenues from
non-affiliate business.
Dental and Vision
We do not underwrite or administer stand-alone dental or vision products other than the stand-alone dental
products that we underwrite in Oregon and Washington. During 2011, we made available to our current and
prospective members in Arizona and California private label dental products through a strategic relationship with
Dental Benefit Providers, Inc. (“DBP”) and private label vision products through a strategic relationship with
EyeMed Vision Care LLC (“EyeMed”). Those stand-alone dental products were underwritten and administered
by DBP affiliated companies and the stand-alone vision products were underwritten by Fidelity Security Life
Insurance Company and administered by EyeMed affiliated companies. DBP also administers dental products
and coverage we provide to our members in Oregon and Washington. Liberty Dental Plans of California, Inc.
serves as the underwriter and administrator for the dental services we provide to our Medi-Cal and Healthy
Families program enrollees. Vision Service Plan serves as the underwriter and administrator for the vision
services we provide to our Medi-Cal and Healthy Families vision program enrollees in California.
Government Contracts Segment
Our Government Contracts segment includes our government-sponsored managed care federal contract with
the Department of Defense under the TRICARE program in the North Region and other health care, mental
health and behavioral health government contracts. On April 1, 2011, we began delivery of administrative
services under a new Managed Care Support Contract (“T-3”) for the TRICARE North Region. Under the T-3
contract for the TRICARE North Region, we provide various types of administrative services including: provider
network management, referral management, medical management, disease management, enrollment, customer
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