Health Net

With their 4-year-old son's life at stake, Mark and Kimberly Zembsch filed suit this week against Health Net, contending that the Woodland Hills-based HMO had refused to let the youngster see the one doctor they believe can treat his rare condition. Jack suffers from metatrophic dysplasia, which causes the spine to twist as its grows, damaging internal organs. The boy lives in Moraga, east of Oakland, but the doctor his parents consider an expert in the disease practices in Delaware.

More buyouts of health insurance companies are expected by year's end, and Health Net Inc. is emerging as a likely acquisition target. Shares of the nation's largest health insurers are up sharply this year, but none more than those of the Woodland Hills-based insurer, which have soared 64%. Health Net shares rose 2.8% on Friday to an all-time high of $47.32, valuing the company at $5.36 billion. The most likely buyers, says Banc of America Securities analyst Joseph D. France, are Aetna Inc.

Days after announcing plans to buy an Orange County-based competitor, UnitedHealth Group -- the nation's No. 2 health insurer -- reported Thursday that its profit in the second quarter jumped 36%. UnitedHealth, based in Minnetonka, Minn., said last week that it would pay $8.1 billion for Cypress-based PacifiCare Health Systems, the nation's largest manager of Medicare plans for seniors.

A Louisiana jury ordered Health Net Inc. to pay $117.4 million in the collapse of a Texas health maintenance organization the company sold in 1999. Attorneys for the Texas receiver said Woodland Hills-based Health Net allowed AmCareco Inc. to buy the company with the HMO's own money, leaving the plan insolvent. Shares of Health Net fell 63 cents to $37.53. From Bloomberg News

Woodland Hills-based insurer Health Net Inc. said quarterly earnings rose on higher premiums, but gains were offset in part by lower revenue and charges related to the settlement of a physician class-action lawsuit. Health Net reported first-quarter net income of $21.3 million, or 19 cents a share, compared with $15 million, or 13 cents, a year earlier. Revenue fell slightly to $2.91 billion from $2.92 billion a year ago.

Health Net Inc., one of California's biggest health insurance companies, posted a larger-than-expected fourth-quarter loss as it swallowed the cost of settling claims disputes with hospitals. The Woodland Hills-based insurer reported a net loss of $85.6 million, or 77 cents a share, contrasted with net income of $89.3 million, or 77 cents, a year earlier. Revenue rose 3.2% to $2.9 billion, largely on the strength of higher premiums.

Health Net of California has been fined $250,000 for underpaying some emergency room and other hospital-based doctors by as much as $7 million, the state Department of Managed Health Care said. The department said it found that the Woodland Hills company had underpaid on 65,000 claims submitted by doctors who were not under contract with the health maintenance organization during the first 10 months of 2004. On Jan.

An unusual medical insurance policy that pays for conventional treatment as well as care at Mexican-style clinics on both sides of the border is now being offered in Orange County. Officials with Health Net of California, a for-profit insurer, announced Friday that the company has extended its binational health insurance plan to people employed by participating Orange County companies.

Health Net Inc. posted a quarterly profit on higher premiums, reversing a year-earlier loss, as the health insurer attempts to negotiate better contracts to rein in hospital costs. Health Net also forecast fourth-quarter profit below analysts' expectations and warned that membership would drop in 2005. The Los Angeles-based health maintenance organization said it might incur further costs in the fourth quarter as it continued to recover. Third-quarter net income was $71.

U.S. health insurers are stepping up efforts to snag Latino business -- on both sides of the border. The latest move came Friday, when Woodland Hills-based Health Net Inc. said it would expand its cross-border insurance program, which allows members to use their coverage to pay for medical care in both the United States and Mexico, with a new initiative targeting small and mid-size Latino businesses in East Los Angeles.