Pentagon contract change saves Health Net jobs [The Tribune-Democrat, Johnstown, Pa.]

May 15--JOHNSTOWN -- More than 100 local jobs at Health Net Federal Services call center in downtown Johnstown have been saved with the Pentagon's announcement that the company will keep its primary contract.

The jobs were threatened in July, when the Defense Department awarded the $16.7 billion contract to Aetna Government Health Plans of Hartford, Conn., to provide managed health-care services in about 20 states under the federal Tricare program.

For the past few years, Health Net has provided the services, which are available to military personnel, retirees and their families. Tricare's North Region includes nearly 3 million eligible members.

California-based Health Net immediately protested the contract change, arguing that Aetna had an unfair advantage because the government posted Health Net's bid price on the Internet. There were also questions about a former high-level Tricare employee who went to work for Aetna.

In November, the General Accounting Office agreed to reconsider, noting it found possible problems with Aetna's bid.

In this week's stunning reversal, the Department of Defense announced it was terminating Aetna's contract and awarding the five-year agreement to Health Net.

Jay Gellert, president and chief executive officer of Health Net Inc., hailed the announcement.

"I want to take this opportunity to thank all of our associates who have continued to provide support for Tricare beneficiaries during the protest period," Gellert said. "Health Net is honored to continue to serve our active duty, National Guard and Reserve members, and military retirees and their families in the North Region."

Health Net employs about 130 people at its Johnstown call center in the Crown American Building, spokeswoman Molly Tuttle said.

The Johnstown call center opened in late 2004. When the official ribbon-cutting was held in February 2005, there were 80 employees, each earning about $25,500 a year.

In addition to Johnstown, Health Net Federal Services has offices in California, Ohio, Rhode Island and Virginia that serve Tricare North Region beneficiaries. The company manages 69 Tricare service centers at military installations or military hospitals.

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