The hospitals affected are owned by Tenet in the desert and also in Orange County. You can read the article below to see where the talks failed with Tenet wanting higher rates and Health Net had their own ideas of rate increases being tied to the consumer price index. Medi-Cal was also in the picture with questions related to federal and state funding. This is effective now and the actual date was December 21, 2012 so patients and doctors will have to scramble to go elsewhere for services.
Health Net is not as large as some of the other giant health insurance companies and back in 2010 they had to sell some of their northeast business to United Healthcare while the Tri-Care contract fiasco was ongoing. Here’s a few back links on that situation as once the initial loss was announced HealthNet needed to make some financial changes and then with the turn of events Health Net was re-awarded the contract for the northeast.
HealthNet Will Keep the Tri-Care North Contract – GOA Investigated the Original Award to Aetna
HealthNet in Connecticut to Lay Off 750 Employees as United Healthcare Takes Over Membership In the Northeast
United HealthCare Purchase of HealthNet in the Northeast Did Not Include Transfer of Employees
UnitedHealthCare Buys a Portion of Health Net in the Northeast
I made mention of the above and it will be interesting to see what other insurers will do to perhaps entice members to change insurance companies as this is a good number of patients and doctors involved with this. Also in 2009 HealthNet agreed to stop using the United Healthcare/Ingenix data base that short changed doctors and hospitals for around 15 years, and almost all the major insurers licensed it from United so all were in the same boat of using “algorithms for profit’ for quite a while. BD
Health insurance provider Health Net, Inc. announced Thursday it will stop covering medical and health services at six Southern California hospitals run by Tenet Healthcare after contract negotiations broke down.
As a three-year contract came to a close at midnight on Dec. 21, the two companies were unable to agree on reimbursement rates for services necessary to renew the contract. Health Net wanted reimbursement rate increases to be tied to the Consumer Price Index, which currently averages about 3 percent, according to the company. Health Net also wanted Medi-Cal reimbursements to be tied to state and federal funding for the program. Tenet was pushing for higher reimbursement rates.
The effected hospitals include Desert Regional Medical Center in Palm Springs, Fountain Valley Hospital and Medical Center, John F. Kennedy Memorial Hospital in Indio, Lakewood Regional Medical Center, Los Alamitos Medical Center and Placentia Linda Hospital.
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