HCA Holdings Inc. (HCA) and Tenet Healthcare Corp. (THC) led hospital stocks higher after the companies held that a settlement of a 13-year-old lawsuit over Medicare Plan payments would enhance revenue and HCA reported higher admissions.
HCA is the biggest for-profit hospital chain, climbed 3.1 percent to $27.57 at the close of trading in New York, while Tenet, No. 3 in the industry, increased 5.3 percent to $5.35, after today’s declaration. Community Health Systems Inc. (CYH), the No. 2 hospital chain, achieved 4.7 percent to $22.39, for its biggest one-day advance in seven weeks.
HCA and Tenet will profit from an industry wide settlement over what the chains hold were underpayments from Medicare Plan, the U.S.-backed insurance program for the elderly and disabled. As stated by the companies in separate statements. HCA, based in Nashville, Tennessee, also held that similar-facility admissions rose 3.2 percent in the first quarter, suggesting the economic recovery in the U.S. may finally help hospitals.
HCA held that the lawsuit agreement signed April 5 will direct to a net revenue gain of $188 million while Tenet held that it expects net cash proceeds of $84 million. Though profits were reduced by a separate change in repayment announced by Medicare Plan last month, the proceeds beat projections the companies had made before reaching the deal, according to them.
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