Dive Brief:
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Tenet Health will be back in Humana’s coverage network after the two companies negotiated a multi-year contract, South Florida Business Journal reported. The companies failed to reach an agreement in 2016, which left Humana members unable to get covered care in Tenet facilities.
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Humana has 1.72 million members in Florida and 938,700 members in Texas, which is also Tenet’s largest footprint with 130 facilities and 78 facilities.
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The companies did not disclose terms of the deal or the impact on the deal to each company’s finances.
Dive Insight:
Texas-based Tenet, one of the nation’s largest for-profit hospital systems, first announced that it had reached an agreement with Humana during its first-quarter earnings call in May. At that time, Tenet officials said the new deal with Humana would run through May 2020.
Tenet said going back into the Humana network of providers represents “the majority of the revenue that Tenet previously generated from Humana under its prior contractual relationship."
The agreement is good news for both companies, Tenet patients and Humana members, who can now get covered care again at Tenet facilities.
Going back into the Humana network is a positive sign for Tenet, which recently reported losses. Tenet reported a $52 million net loss in continuing operations for the first quarter and a quarterly revenue loss of 3.3% in the fourth quarter of 2016. Tenet officials pointed to a lack of demand for the reason behind the losses. Tenet is also looking to sell three acute care hospitals in Texas to HCA Holdings in a $725 million deal expected to close in the third quarter.
Kentucky-based Humana, on the other hand, has announced better finances lately. The payer reported net income of $1.1 billion for the first quarter, which was a huge jump from $254 million in the same period the previous year. Humana attempted to merge with Aetna, but dropped the idea after a court ruling blocked the deal. Even then, Humana officials said the failed merger helped the company’s finances in the first quarter of this year.
Tenet is a major healthcare provider with 100 hospitals and 470 outpatient centers in 47 states. Humana has about 14 million members.