LV firm in $58 million settlement with Pentagon

Thursday, Jan. 11, 2001 | 11:18 a.m.

Sierra Health Services Inc., a Las Vegas managed-care health insurer, today said it reached a $58.2 million settlement with the U.S. Defense Department for money it is owed under a military health-insurance program.

Sierra will get an immediate $21.3 million payment, the company said. The remaining $36.9 million will be paid monthly until May 2003, the company said.

Sierra said the money is for back claims under a contract between Sierra Military Health Services Inc. and the Defense Department's Tricare program for members of the military and their families. The settlement involves contract changes for the program made before July 1, Sierra said.

Sierra said it also got $37 million in the fourth quarter for changes that reflect the rising cost of caring for people covered by the government contract.

The settlement isn't expected to affect earnings, Sierra said, though the company expects better cash flow and a stronger balance sheet for the first quarter.

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