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Wellpoint Shares Up on News of Contract

June 09, 1998|Bloomberg News

Wellpoint Health Networks Inc. shares rose nearly 5% after the company's Blue Cross of California unit said it had reached an agreement with Sutter Health on reimbursement rates. The Woodland Hills-based managed-care company's shares rose $3.13 to close at $65 on the NYSE. Blue Cross of California and closely held Sutter Health agreed to a three-year contract under which Blue Cross customers can receive care at Sacramento-based Sutter's 23 acute-care hospitals and long-term care centers in California. A month ago, Sutter Health canceled its contract with Wellpoint, saying it was not being reimbursed enough to cover its costs. Although the loss of the Sutter contract alone would not have had a "severe" effect on Wellpoint's revenue, analysts said, resolving the dispute is a positive development for Wellpoint.

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