Health Net Enters into Seven-Year Master Services Agreement with Cognizant

Health Net, Inc. announced that it has entered into a master services agreement with Cognizant Healthcare Services, LLC, an indirect, wholly owned subsidiary of Cognizant.

“What’s important about this new agreement with Cognizant is that there are specific, measurable outcomes that we believe will contribute to reduced administrative costs and support future growth and innovation,” said Jay Gellert, President and Chief Executive Officer of Health Net.

Health Net had previously announced on August 6, 2014, that it had signed a Letter of Intent with Cognizant as part of Health Net’s commitment to address its scale issue and reduce administrative costs.

Under the terms of the seven-year master services agreement, Cognizant will provide consulting, technology and administrative services to Health Net in the following areas: claims management, membership and benefits configuration, customer contact center services, information technology, quality assurance, appeals and grievance services, and medical management support.

As part of the agreement, Cognizant will be responsible for meeting specific targets for improving the quality, effectiveness and efficiency of many of Health Net’s operating metrics. Such metrics include claims processing and routing times, customer contact center response times, and contact center customer satisfaction targets.

Under the agreement, the services Cognizant will provide must meet all regulatory compliance requirements, which will be monitored through Health Net’s dedicated governance and oversight structure.

In addition, Health Net and Cognizant have entered into an asset purchase agreement for the sale of certain Health Net software assets and related intellectual property to Cognizant, including Health Net’s technology platform. Cognizant expects to use and develop this technology platform to provide enhancements to Health Net’s operations.

The master services agreement is expected to accomplish several goals:

- Continue and enhance Health Net’s delivery of high service levels for Health Net’s members and providers;

- Create new opportunities for innovation in Health Net’s products and services;

- Strengthen Health Net’s technology platform;

- Allow Health Net to more efficiently use its capital resources; and

- Enhance Health Net’s ability to effectively meet all regulatory and health care reform compliance requirements.

The transaction, including the related asset purchase, is expected to close in the first half of 2015, subject to receipt of required regulatory approvals.

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