Tenet Receives Settlement for Katrina Losses

Tenet Healthcare Corp. said Thursday that its property insurers had paid the company $340 million to settle claims after half a dozen of its hospitals suffered business interruptions caused by Hurricane Katrina.

Tenet, the second-biggest hospital company and the chain most devastated by the hurricane, said the deal was one of the first big commercial property insurance settlements on damage from the storm, which battered the Gulf Coast region in August. Tenet said it had received all of the money.

Analysts said the recovery was in line with expectations or better than expected, and Tenet stock gained 1 cent to $6.54.

Dallas-based Tenet said the settlement forestalled a dispute that could have taken years to resolve.

A majority of the settlement funds will go toward business-interruption losses, as opposed to physical damage, Tenet spokesman Steven Campanini said.

Tenet plans to sell four of the five New Orleans hospitals, and it has already sold the Biloxi hospital to Health Management Associates Inc. All of the facilities sustained significant storm damage, and two New Orleans hospitals have not reopened.