Tenet Healthcare has reached an agreement totaling $340 million with its various property insurers to settle the hospital group's physical damage and business interruption claims from Hurricane Katrina, the company said.
The settlement is one of the first major commercial property insurance settlements resulting from Hurricane Katrina damage, according to Tenet.
A company spokesman, Steven Campanini, said about 24 carriers were involved and their portions of the settlement varied depending on their limits and liabilities. He would not disclose their names.
Hurricane Katrina significantly damaged five of Tenet's hospitals in the New Orleans area and one in Biloxi, Miss., as well as five diagnostic imaging services, outpatient radiology centers and other support property in New Orleans, said the company.
"By settling this matter quickly, we have avoided the disagreements and differences over interpretation that can occur in insurance claims of this magnitude and complexity…This also gives us the flexibility to apply these funds to meet the company's overall capital needs," said Trevor Fetter, Tenet's president and chief executive officer.
The Dallas-based company plans to sell most of its hospitals in the New Orleans market and has already sold the Biloxi medical center, according to Tenet.
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