Health Net Inc. has signed a contract with Prime Healthcare Services to add 14 hospitals to its network, the companies announced Thursday.

The Woodland Hills insurer said the deal would provide its policy holders with in-network prices and benefits at all 14 California hospital operated by Prime, an Ontario-based for-profit corporation.

In the Valley, Prime operates Encino Hospital Medical Center and Sherman Oaks Hospital. The agreement also covers patients covered by Health Net's Medicare and Medi-Cal programs.

“Partnering with Health Net and finalizing this agreement allows us to expand our relationship with managed care health plans and provide affordable healthcare to a greater portion of California,” said Dr. Prem Reddy, chairman and chief executive of Prime.

Prime operates a total of 23 hospitals in six states.

Health Net closed up 72 cents, or 2.3 percent, to $32.61 on the New York Stock Exchange.