Managed care insurer Health Net reported 2012 fourth quarter earnings down 91 percent from the previous year, after litigation, severance costs and declines in commercial enrollment. The company had fourth quarter 2012 revenue of about $2.8 billion — roughly equal to fourth quarter 2011 — but took several losses, and is also spending $30 million on healthcare reform compliance. Last quarter, Health Net saw a $13.8 million pretax loss in its divested segment (including the sale of a prescription drug business to CVS), $7 million in litigation expenses, $5 million in severance costs and higher medical utilization, all while it renegotiated a contract with hospital networkTenet Healthcare. Although overall membership declined slightly in 2012, to 2.6 million commercial members and 2.9 million TRICARE members, Health Net says enrollment in its tailored network commercial health plan is growing, ending the year with about 432,000 members according to a recent report at Healthcare Payer News.
