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Sutter Health and Health Net of California Announce Two-Year Agreement

Posted on: Wednesday, 20 July 2005, 15:00 CDT

In a move that helps preserve the stability of Health Net of California's Northern California physician and hospital network, Health Net and the not-for-profit Sutter Health network of community-based hospitals, doctors and other services in Northern California today announced they recently reached agreement on a new two-year contract.

The new contract starts January 1, 2006, and ensures continued, uninterrupted coverage for Health Net members who use Sutter medical groups and who access Sutter hospitals. The contract covers those with employer-sponsored (commercial) health coverage and both employer-sponsored and individual Medicare benefits, including the Medicare Part D stand-alone drug benefit that becomes effective in 2006.

"This agreement is a milestone for Health Net," said Stephen Lynch, president of Health Net of California. "Our new contract with Sutter Health is expected to help us re-enter Sonoma and Solano counties with our Medicare Advantage plan for seniors. Until now, health care costs there made it impractical for us to serve Medicare beneficiaries. Our partnership with Sutter can help us realize our goal of providing affordable, quality health care to seniors in the region."

"This is great news for our patients and Health Net members," said Sutter Health president and CEO Patrick Fry. "We're pleased to continue building our collaborative relationship and providing quality care for members and patients."

The expansion of Health Net's Medicare Advantage plan, called Seniority Plus, into Sonoma and Solano counties is pending approval by the Centers for Medicare and Medicaid Services (CMS). The planned re-entry into the two Northern California counties is part of Health Net's goal to significantly expand the company's nationwide presence in Medicare programs, including entry into five new states and participation in the Part D stand-alone drug benefit. The decision by CMS is expected later this year.

Health Net of California, a subsidiary of Health Net, Inc. (NYSE:HNT), is one of the largest health plans in the state, serving more than 2.3 million members statewide. It contracts with more than 50,000 physicians, 300 hospitals, and 4,600 pharmacies, giving its members greater choice and more convenient access to care. Its commercial lines of business have received "Excellent" and its Medicare lines of business have received "Commendable" accreditation status from the National Committee for Quality Assurance. For more information about Health Net, visit its Web site at www.healthnet.com.

Sutter Health is a family of physician organizations, not-for-profit hospitals and other health care service providers that share resources and expertise to advance health care quality. Serving more than 100 communities in Northern California, Sutter Health is a regional leader in cardiac care, cancer treatment, orthopedics, obstetrics and newborn intensive care, and is a pioneer in advanced patient safety technology. For more information, visit www.sutterhealth.org.

Certain matters discussed in this release contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. These statements are based on management's analysis, judgment, belief and expectation only as of the date hereof, and are subject to uncertainty and changes in circumstances. Without limiting the foregoing, the words "believes,""anticipates,""plans,""expects,""may,""should,""could,""estimate,""intend" and other similar expressions are intended to identify forward-looking statements. Actual results could differ materially due to, among other things, rising health care costs, trends in medical care ratios, operational issues, health care reform and general business conditions. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the "Risk Factors" section included within the company's most recent Annual Report on Form 10-K filed with the SEC and the risks discussed in the company's other periodic filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this release.

Source: Business Wire

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