Health Net, Tenet California Reach Agreement in Claims Dispute
Health Net will pay $28.5 million to Tenet California to settle payment disputes dating from before Nov. 1, 2004, when a new contract took effect, the Los Angeles Daily News reports. Tenet California agreed to the terms of the agreement, which the companies announced Monday, but the Daily News reports that Health Net owed the subsidiary of Dallas-based Tenet Healthcare more than $28,5 million. Tenet would not disclose the amount.
An arbitration demand filed by 39 Tenet hospitals in July 2003 alleged that Health Net owed the facilities $45 million in claims. A document Health Net filed with federal regulators indicated that the company could have to pay as much as $120 million, including attorney fees and punitive damages. Health Net later filed a countersuit against Tenet seeking $100 million on "various theories of recovery" (Pondel, Los Angeles Daily News, 2/14).
Stephen Newman, CEO of Tenet California, said, "This settlement, combined with the new contract, provides a platform for stability for both companies in the California market."
Stephen Lynch, president of Health Net of California, said, "We are pleased to have put these issues with Tenet in the past and look forward to a mutually rewarding partnership in the future" (Sacramento Business Journal, 2/14).