Southern District Health Board chairman Joe Butterfield confirmed yesterday he was speaking with South Link Health (SLH) chairman Dr Dean Millar-Coote.
Hopes for a commercial settlement appeared to have been extinguished last month when it was revealed the dispute could involve fraud.
The disclosure of historic legal advice advising of the possibility prompted SLH executive director Dr Murray Tilyard to say it effectively ended mediation.
SLH denies it has done anything wrong, or owes any money.
Mr Butterfield said yesterday: ''I have been in discussion with South Link Health's chairman.
''It's fair to say that the chairman of South Link Health and I recognise that there needs to be discussions to resolve this matter.''
Mr Butterfield declined to comment on the form negotiations would take, saying: ''That's all to develop''.
Contacted by email, Dr Millar-Coote said: ''I can confirm that Joe [Butterfield] and I are discussing the issue with a view to resolving it''.
''At this stage, it is the two of us talking to establish a mechanism for resolving the dispute.''
He confirmed Mr Butterfield initiated the talks on February 20, the day after a health select committee hearing in Wellington at which the legal advice was revealed, putting a public spotlight on the dispute.
Board member Richard Thomson, who alerted the Auditor-general last year in frustration at years of inaction, yesterday welcomed news of renewed discussions.
''There are lots of questions ... but I've been pretty clear through the whole process that if we could resolve this through mediation or through discussion that would be by far the best way to go.
''It has proved unsuccessful to date, so if there is now as a result of the publicity to be a further attempt at that, then I welcome that.''
Questions have emerged about why the Ministry of Health, then Crown monitor Stuart McLauchlan and Health Minister Tony Ryall were unaware until recently of legal advice obtained in November 2010 that the dispute could involve fraud.
Last month, the Southern District Health Board engaged a forensic accountant to examine the matter, but has declined to answer questions about it.
Speaking to the Otago Daily Times on Monday, New Zealand Taxpayers' Union executive director Jordan Williams said he could not understand the apparent lack of action.
''It seems unbelievable this slipped through the cracks at the Ministry [of Health]. The minister [Tony Ryall] should at least be asking why that was the case. If they can't answer those questions, if they hadn't got that legal advice, how did that happen?
''Something that large [in monetary terms], and the political sensitivity, and the history in the deep South [of health fraud], why wasn't this the top of the agenda?''
The dispute initially involved about $5.3 million from savings in 1990s-era South Island-wide laboratory and pharmaceutical contracts.
It is thought now to be possibly worth about $15 million, with the effect of interest.
SLH, a Dunedin-based independent practitioner association, was entitled to spend the savings, but had to have specific approval for the primary health programmes, and the parties differ on whether that was given.
