Health Net of California Earns NCQA Accreditation for Three Lines of Business

Business Wire, May 22, 2007

Medi-Cal Business Receives "Commendable" Designation; Commercial HMO/POS and Medicare Advantage Plans Maintain "Excellent" Status

LOS ANGELES -- Spotlighting its commitment to quality, Health Net of California announces its Medi-Cal line of business has earned the "Commendable" accreditation status from the National Committee for Quality Assurance (NCQA), the independent, non-profit organization dedicated to measuring the quality of America's health care.

In addition, Health Net of California's commercial HMO and POS line of business and its Seniority Plus Medicare Advantage line of business both maintained their "Excellent" accreditation designations from the NCQA.

"These designations are proof positive that Health Net works hard with its customers and contracting physicians to improve the quality of medical care and provide great service," said Stephen Lynch, president and chief executive officer of Health Net of California.

"Receiving recognition for our Medi-Cal quality efforts differentiates us from many of our competitors whose quality standards have not been recognized by the NCQA," said Dave Meadows, vice president of State Health Programs for Health Net of California.

The NCQA accreditation process evaluates how well a health plan manages quality throughout every part of its delivery system -- physicians, hospitals, affiliated providers, and administrative services -- to continuously improve health care for its members. The NCQA's accreditation standards are publicly reported in five categories:

Access and Service

Do health plan members have access to the care and service they need?

Qualified Providers

Does the health plan assess each doctor's qualifications and what health plan members say about its providers?

Staying Healthy

Does the health plan help members maintain good health and detect illness early?

Getting Better

How well does the health plan care for members when they become sick?

Living with Illness

How well does the health plan care for members when they have chronic conditions?

"NCQA's 'Excellent' accreditation status is reserved for the best health plans in the nation," said Margaret E. O'Kane, president of NCQA. "It is only awarded to those plans that meet or exceed NCQA's rigorous requirements for consumer protection and quality improvement and deliver excellent clinical care. Achieving an accreditation status of 'Commendable' from NCQA is a sign that a health plan is serious about quality. It is awarded to plans whose service and clinical quality meet or exceed NCQA's rigorous requirements for consumer protection and quality improvement."

In addition to the accreditation designations, the NCQA determined that Health Net's Seniority Plus Medicare Advantage plan has satisfied "deeming" requirements for the Centers for Medicare & Medicaid Services (CMS). This means that Seniority Plus complies with several CMS guidelines and may bypass several of CMS' future review standards.

Health Net of California, a subsidiary of Health Net, Inc. (NYSE:HNT), is one of the largest health plans in the state, serving nearly 2.3 million members statewide(a). It contracts with more than 51,000 physicians, 300-plus hospitals and nearly 5,000 pharmacies, giving its members greater choice and more convenient access to care(a). For more information about Health Net, please visit its Web site at www.healthnet.com.

(a) PPO coverage is provided by Health Net Life Insurance Company, a subsidiary of Health Net of California. Member and provider data include Health Net Life.

Cautionary Statements

This release contains 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 a number of 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, negative prior period claims reserve developments, trends in medical care ratios, issues relating to provider contracts, litigation costs, 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. 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.