Health insurance provider Health Net, Inc. announced today it will stop covering medical and health services at six Southern California hospitals run by Tenet Healthcare including Los Alamitos Medical Center 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 move will force thousands of people covered by Health Net to see their doctors or schedule treatments at 10 other available hospitals.
The effected hospitals include Desert Regional Medical Center in Palm Springs, Fountain Valley Regional Hospital and Medical Center, John F. Kennedy Memorial Hospital in Indio, Lakewood Regional Medical Center, Los Alamitos Medical Center and Placentia Linda Hospital.
``The decision to proceed with the termination process was difficult,'' said Steve Sell, president of Health Net's Western Region Health Plan. ``We had no choice, however, as Tenet Healthcare has refused our requests to negotiate a new contract that more accurately reflects current statewide market conditions.''
``Our goal is to help preserve affordable benefits for our customers, not pass along inflated health care costs,'' Sell added.
UPDATE: Rebecca Ayer, a spokesperson for Tenet Healthcare, released this statement Friday:
"Our hospitals are committed to providing high-quality and accessible care to the communities they serve. We work diligently to maintain strong relationships with several managed care companies. Over the past several months, we have been working with Health Net to renegotiate the terms of our managed care contracts at six of our hospitals in Southern California.
"At the time of our last meeting, we were in full agreement on the terms of our contract. It is unclear to us as to why Health Net issued a contract termination and publicly released inaccurate information. We have full agreement with Health Net on reimbursement rates at these six hospitals. We are puzzled and disappointed by their public comments. Our patients remain our top priority and we will do all that we can to ensure they continue to receive the high-quality health care they have come to expect from our Southern California hospitals."
In a statement, Health Net encouraged affected members, employers, brokers, and consultants to call its customer services department at (800) 522- 0088.
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- City News Service