Tenet Healthcare Corp., Orange County’s largest hospital operator with 10 facilities here, has reached agreement on extending its contract with Blue Cross of California, which counts 459,400 local enrollees.
The current pact between Tenet and Blue Cross, a unit of Thousand Oaks-based WellPoint Health Networks Inc., is set to expire April 15. The two companies say they’ve come to terms on a new multiyear contract.
“Attaining an agreement this early in the process signifies that we can achieve solutions with our provider partners cooperatively and without a public showdown,” said Ron Williams, Blue Cross of California’s president. Blue Cross has been going through a contract crackup with Sutter Health, a 40-hospital system in Northern California.
Blue Cross also is a “partner health plan” with Orange-based St. Joseph Health System, which underwent a high-profile contract split with several managed care companies last year. St. Joseph, citing concerns about sharing risks, decided last year to pare its managed healthcare network from 17 to five health plans.
Santa Barbara-based Tenet’s Orange County hospitals covered by the new contract include: Chapman Medical Center, Orange; Coastal Communities Hospital, Santa Ana; Fountain Valley Regional Hospital and Medical Center; Garden Grove Hospital and Medical Center and Irvine Regional Hospital and Medical Center. The other facilities are Los Alamitos Medical Center, Placentia-Linda Hospital, Santa Ana Hospital Medical Center, Western Medical Center-Anaheim and Western Medical Center-Santa Ana.
Blue Cross spokesman Michael Chee declined to give specific details about the contract’s financial terms. He did say the two companies were able to “mutually come to agreement on adequate reimbursement” in view of cost pressures stemming from new technologies.
“It’s important to us to have continuing, uninterrupted business relationships on terms that we can accept,” said Harry Anderson, a Tenet spokesman.
While saying Tenet was pleased to get the Blue Cross contract done without disruption, Anderson noted that the hospital system has walked away from managed care contracts that didn’t make financial sense.
The deal will cover Tenet’s 10 local hospitals and 30 other California facilities until June 1, 2004. The companies said that there will be no disruption of service to Blue Cross members who seek care at any Tenet hospital, and patients can continue to see their doctors. It covers all Blue Cross HMO members, Prudent Buyer preferred-provider organization members, Medicare SeniorSecure and Medicare supplemental members. n
