The new year opened with a big shift for three local hospitals that saw their contracts with Health Net Inc. terminated at the end of 2012.
Los Angeles-based Health Net, which has some 139,000 commercial HMO and PPO members in Orange County, ended its contracts with Fountain Valley Regional Hospital and Medical Center, Los Alamitos Medical Center, Placentia-Linda Hospital and three other Southern California hospitals. All six of the hospitals are owned by Dallas-based Tenet Healthcare Corp.
Steve Sell, president of Woodland Hills-based Health Net’s Western region health plan, called the terminations “difficult” but also said the insurer felt it had no choice.
“Tenet Healthcare has refused our requests to negotiate a new contract that more accurately reflects current statewide market conditions,” Sell said in a release.
A statement from Tenet said that it has been working to renegotiate the terms of its managed care contracts with Health Net.
“At the time of our last meeting, we were in full agreement on the terms of our contract,” Tenet said. “It is unclear to us as to why Health Net issued a contract termination and publicly released inaccurate information.”
Tenet and Health Net were nearing the end of a three-year contract when the health insurer announced the termination on Dec. 21. The insurer said it believes that Tenet’s reimbursement “should be in line with the medical consumer price index, which currently averages more than 3%.”
Reimbursement for state- and federally funded programs such as Medi-Cal “need to be consistent with the funding for those programs,” Health Net said, adding that it and Tenet California have been “unsuccessful in reaching agreement on reimbursement amounts.”
Sell also threw this jab at Tenet:
“Our goal is to help preserve affordable benefits for our customers, not pass along inflated healthcare costs,” he said.
Tenet is “puzzled and disappointed” by Health Net’s public comments, the hospital operator said.
Apria Appoints Figueroa
Lake Forest-based home healthcare provider Apria Healthcare Group Inc. appointed John Figueroa as chief executive and chairman of its board of directors.
He replaces Norman Payson, who has announced his intention to retire from those positions and will remain on Apria’s board and serve as a senior adviser.
Figueroa is going to move to Denver, where he will also assume the position of chief executive for Coram LLC, which is Apria’s home infusion business unit.
Daniel Greenleaf, who had been Coram’s chief executive for the past eight months, has left the company to pursue other opportunities.
Daniel Starck, a former executive at Irvine-based healthcare software and service provider CorVel Corp., continues to lead Apria’s respiratory therapy and home medical equipment business as chief executive of the Apria Healthcare Inc. business unit. The unit accounts for about half of the parent company’s revenue and will remain in Lake Forest.
Figueroa was most recently chief executive of Omnicare Inc., a Cincinnati-based healthcare services company.
Vertos Raises $2.1M
Vertos Medical Inc., an Aliso Viejo-based medical device maker, has raised about $2.1 million in debt financing, according to a federal filing.
Vertos is developing interventional medical devices to treat lumbar spinal stenosis, or a narrowing of the spinal canal, without major surgery.
The company’s filing did not disclose either the transaction round, the investor, or what the proceeds will be going for.
Vertos’ set of devices for back pain, which are known as “mild,” received European regulatory clearance at the end of October. Mild has been cleared in the U.S. since 2008, and some 12,000 people have received treatment here, according to the company.
Auxilio Update
Mission Viejo-based Auxilio Inc. recently said that it expects to become cash-flow positive from operations during 2013, based on the number of contracts that it closed since December 2011. Auxilio helps hospitals and healthcare providers cut their dependence on paper records.
Bits and Pieces:
Timothy Welke is now vice president of clinical operations at Costa Mesa-based clinical research organization CiTrials. Welke’s position is newly created. He was previously director of strategic recruitment for North America at Waltham, Mass.-based Parexel International Corp. … Fountain Valley-based MemorialCare Health System said Orange Coast Memorial Medical Center and Saddleback Memorial Medical Center, which has campuses in Laguna Hills and San Clemente, received “A” safety scores from San Francisco-based Leapfrog Group, a coalition of employers and large health benefit purchasers.
