It’s not a secret that commercial payers are navigating an earnings slump.
Weighed down by elevated member utilization and staring down stagnant proposed Medicare Advantage (MA) rates for 2027, insurers are looking to lessen the pain by securing more favorable network contracts with providers and increasing scrutiny of reimbursement claims. The former has recently led to some high-profile dustups in which MA contracts with health systems are permitted to expire, while the latter has forced hospitals to devote more resources toward combating denials.
However, for-profit hospital and ambulatory surgery center chain Tenet Healthcare isn’t viewing payer pushback as a major headwind. In last month’s earnings call, executives told analysts that its commercial rate updates are so far landing in a healthy range of 3% to 5%. The company is also almost entirely contracted for 2026, and about 80% contracted for 2027, they said.
Speaking this week at the Barclays 28th Annual Global Healthcare Conference, CEO Saum Sutaria, M.D., acknowledged the “turmoil in the payer and provider markets that’s playing out very publicly” but said the fundamental nature of Tenet’s payer negotiations are still the same.
“The topics that generate contention are similar, I don’t think they’ve changed very much,” the CEO said. “I think there’s a lot more noise around them, but for us what I think is becoming clearer and clearer is that there is a value that our combined portfolio brings” that helps secure stable rate increases.
Helping grease the wheels is an alignment between payers and Tenet in pushing to generate savings by delivering care in lower cost settings, such as a freestanding location rather than a hospital-associated outpatient department, he said. Tenet’s acute care business also tends not to be “the premium-priced competitor, or the highest-priced competitor” in its markets, making the company more attractive to cost-conscious commercial payers, he added.
As for claims and reimbursement, Sutaria last month reiterated comments from prior earnings calls that Tenet has increasingly “been setting up systems with the health plans to have adjudication mechanisms, to work with them on [claims disputes] in order to resolve these things in a less resource-intensive way.”
The CEO expanded on that point at this week’s conference, acknowledging that denials have been increasing “at a rate that is obviously frustrating.” Though the company and its Conifer revenue cycle subsidiary are eventually securing payments, there’s a remaining opportunity to cut costs by avoiding or making more efficient the back-and-forth on disputes.
Still, he said that Tenet’s broader discipline around coding and “reasonable utilization” compared to other providers is a point in its favor during commercial contract negotiations.
“Appropriateness of admission from the ED, for example, is something that many health plans often recognize us for in the discussions that we have with them,” he said. “We feel like we have … more defensible, both, operations and pricing platform. It’s value-creating for both parties, and therefore as we look forward we tend to be able to negotiate reasonable rate escalators with the payers.”
Tenet outperformed in its final quarter of 2025 and promised strong revenue and earnings growth for 2026, though an outlook of 1% to 2% volume growth is below its historical performance.
Sutaria this week reiterated the company is “pretty confident” that it’s given “reasonable guidance for this year.” He and Chief Financial Officer Sun Park were hesitant to give any concrete details on how a key factor in the volume and demand forecast—Affordable Care Act exchange plan upheaval, expected to bring a $250 million hit to the company—was playing out, only noting that some states like Michigan and Arizona “seemed to have a little more pressure” as of January enrollment numbers.