Health Net terminates agreements with six Tenet Healthcare hospitals Health Net (HNT) announced that its subsidiaries exercised their contractual option to terminate agreements with all six of Tenet Healthcare’s (THC) Southern California hospitals. The terminations were effective midnight on Dec. 21. Health Net and Tenet Healthcare were nearing the end of a three-year contract. Health Net said it believes Tenet’s reimbursement should be in line with the medical consumer price index, which currently averages more than 3%, and that reimbursement for state- and federally funded programs like Medi-Cal needs to be consistent with the funding for those programs. In recent discussions for a new contract, Health Net and Tenet have been unsuccessful in reaching agreement on reimbursement amounts.
Health Net downgraded to Sell from Buy at Citigroup Citigroup downgraded Health Net two notches to Sell from Buy citing the stock's 60% year-to-date rally and its belief that 2015 consensus estimates are too high. Citi thinks the company's dual enrollment in California is tracking well short of projections. It raised its price target for shares to $42 from $35.