Each month, this page features selected short items about state
health-care policy digested from newspapers around the country.
Clip File
Blue Cross Blue Shield of Massachusetts proposes dividing company into four non-profits
BOSTON—In an effort to reverse its financial losses, Blue Cross and Blue Shield of Massachusetts has proposed dividing itself into four separate nonprofit companies. Three of the companies would focus on separate core businesses: health maintenance organization, traditional group indemnity insurance and individual indemnity insurance. The three companies would operate under a holding company.
Blue Cross officials insisted they were not preparing to sell the company following the restructuring, but were committed to remaining a nonprofit insurer. William Van Faasen, Blue Cross’ current chief executive said the reorganization would make it possible for the company to be more "agile."
Boston Globe, Feb. 6, 1997
Tennessee to audit behavioral health organizations managing state’s public mental health program
NASHVILLE, TN—Financial audits of two behavioral health organizations (BHOs) managing Tennessee’s public mental health program, TennCare Partners, will begin shortly, acting mental health commissioner Ben Dishman told an oversight committee on TennCare in January.
Mr. Dishman said the state also is conducting a patient satisfaction survey and an analysis of mental health services. It also is tracking patients released from state hospitals.
The committee grilled Mr. Dishman on reports that mental health centers and providers are having serious financial problems. The commissioner acknowledged that there are concerns about the timely payment of claims by the BHOs.
The executive director of the Midtown Mental Health Center in Memphis told the committee her nonprofit agency has lost
$2 million in recent months and is $750,000 into its line of credit.
At another legislative hearing in February, TennCare Executive Director Theresa Clarke said the state has no way of knowing how much the BHOs are spending on substance abuse or mental health services. Commissioner of Health Nancy Menke also expressed frustration with trying to get information about the services being provided to patients in order to determine if there’s a problem.
Mr. Dishman noted that the state has increased what it pays for mental health services from $350 million in 1996 to $369 million in 1997. "It’s hard to see how we are underfunded when we’re spending more," he said.
Commercial Appeal, Memphis, TN, Jan. 14, Feb. 7, 1997
Minnesota Legislature again considers prescription drug program for low-income seniors
ST. PAUL, MN—For six years, the Minnesota Legislature has been considering various proposals for a prescription drug program for low-income seniors. In January, the legislature once again took a look at the issue when the House Health and Human Services budget committee took testimony on an official report, "Options for a Prescription Drug Program for Seniors," which was released in November . The report, which did not draw any clear-cut conclusions, laid out at least five proposals. These include: an expansion of the MinnesotaCare program, which provides subsidized coverage to low-income Minnesotans; a discount program at hospital pharmacies; expanding income eligibility for the Qualified Medicare Beneficiaries (QMB) program (dual eligibles) to 150% of the federal poverty level; a discount program for those below 200% of the federal poverty level offered by HMOs serving the Medicare population; and leveraging Minnesota’s participation in a multi-state government purchasing pool to provide lower priced drugs to seniors.
"We had hoped to find a viable, attractive option and didn’t," says Denese McAfee, a research analyst for the state Health Department. Expanding Medicare to cover drugs and getting rid of the discrepancy in payments to Minnesota compared with other parts of the country would be the best solution, she noted.
St. Paul Pioneer Press, Jan. 15, 1997
Two groups of Florida doctors drop plans for HMOs
MIAMI, FL—Two groups of Florida physicians have dropped plans to launch doctor-backed HMOs, citing competition in the health care industry and an apparent lack of physician interest and confidence.
The two organizations, Primus Health Care of Aventura and Doctors’ Health Plan of Jacksonville, dropped their plans when the stock offerings fell short of the fundraising goal. Physicians purchased only $2.4 million of stock in Doctors’ Health Plan in the past six months, less than 10% of the goal to raise $30 million. Primus raised only $5 million, one-third of the $16 million goal.
According to the American Association of Health Plans, only 15 of the nation’s 639 HMOs, or about 2%, were owned by physicians or medical groups in 1995.
Miami Herald, Jan. 7, 1997
Florida rejects Medicaid contract to leading HMO because of concerns about CEO of merger partner
TALLAHASSEE, FL—The state of Florida has declined to award a Medicaid contract to one of the most prominent HMOs in its state program because it is merging with another HMO whose chief officer has a conviction. Colleen David, spokesperson for the Agency for Health Care Administration (AHCA), told the Sun Sentinel, "this is a first. The agency has never before cited this statute as the reason to deny approval of a plan."
The agency decided not to give a Medicaid contract to a merged company comprising Miami-based Physician Corp. of America and Sierra Health Services of Las Vegas; the merger is scheduled to take place March 31.
Florida law prohibits the agency from issuing a Medicaid HMO contract to a company in which an officer or director or an owner with more than 5% stock has been found guilty of fraud or of any other charge related to providing health services on a prepaid or fixed sum basis.
Dr. Anthony Marlon, the largest shareholder of Sierra, was convicted of a misdemeanor in Nevada in 1991 for providing false financial information for a federal contract for health care services, the Sentinel reports. Dr. Marlon disclosed the conviction on his Department of Insurance application.
Dr. Marlon has pointed out that he would own less than 5% of the merged shares of the companies and that his company is participating in Nevada’s Medicaid program.
Florida officials have invited the companies to submit a plan with a new management structure that would overcome the objection to Dr. Marlon’s stake in the merged company.
Sun Sentinel, Jan. 28, 29, 1997
Tennessee governor proposes to extend coverage to all uninsured children in state through TennCare
NASHVILLE, TN.—Starting April 1, all uninsured children in Tennessee could be eligible for TennCare coverage under the governor’s proposed 1997-98 budget. While the governor has been urged to reopen enrollment to uninsured Tennesseeans, he says the state can’t afford to make TennCare available to everyone, but it can afford to open enrollment to uninsured children.
Extending coverage to Tennessee’s estimated 68,000 uninsured children will cost the state about $20 million and the federal government about $35 million.
State officials believe that 75% of uninsured children would take advantage of the coverage. Those above the poverty level would pay a sliding-scale premium based on income.
The Commercial Appeal, Memphis, TN, Jan. 14, 1997
Newspaper says Ohio regulators may reject purchase of Blue Cross because of low price
COLUMBUS, OH—The Columbus Dispatch reports that the state Department of Insurance is prepared to reject Columbia/HCA Healthcare’s proposed purchase of Blue Cross and Blue Shield of Ohio, after determining that the insurance company is worth twice Columbia’s offering price of $299.5 million.
The investment banking firm, Alex Brown & Sons, evaluated the worth of Blue Cross at the insurance department’s request. The Alex Brown report, which is expected to be made public when the department announces its decision in February, set the value at about $600 million.
According to sources close to the situation, the newspaper reports that the state will not approve Columbia/HCA’s March 1996 offer on several other grounds besides the valuation issue. The department also will oppose the transaction because no provisions have been made by Blue Cross to distribute charitable assets to the public and because the transaction is a de facto demutualization, or conversion from a company owned by its policyholders to one owned by stockholders. Ohio’s heavily regulated demutualization process requires a three-member committee to determine the value of the company, conduct a public hearing and oversee the payment of stock or cash to policyholders after a conversion.
Blue Cross has said the sale is a transfer of assets to Columbia, not a demutualization.
Attorney General Betty Montgomery sued to block the deal over the the lack of provisions to make payments to charity to compensate for decades of tax breaks. Earlier this month, former Blue Cross plan Central Benefits Mutual Insurance of Columbus said it would establish a $5.1 million charity for medical services for the needy because it was considering demutualization.
Columbus Dispatch, Jan. 25, 1997
Court rules North Carolina public hospital must divulge price list it negotiates with local HMO
RALEIGH, NC—A North Carolina newspaper won another battle in its effort to have a public hospital disclose its discounting arrangements with a health maintenance organization. A three-judge panel for the North Carolina Court of Appeals recently ruled that because the hospital is a public body, the "price list" it negotiates with a managed care organization should be made available under the state’s public records law.
The Morning Star of Wilmington sued New Hanover Regional Medical Center for a copy of its contract with PHP Inc., a Greensboro health maintenance organization that now operates as United HealthCare of North Carolina.
"We recognize that this holding arguably may adversely affect public hospitals’ ability to compete with nongovernmental entities," one of the judges wrote. "But we consider that question an appropriate legislative issue."
The issue of shielding public hospitals’ managed care contracts from public disclosure is likely to be considered in the coming legislative session.
Charlotte Observer, Charlotte, NC, Jan. 22, 1997
Empire Blue Cross to use outside medical experts to review denials of experimental treatments
ALBANY, NY—Empire Blue Cross and Blue Shield will begin using outside medical experts to review denials of requests for experimental and investigational treatments for terminally ill patients.
Empire’s decision comes several months after regulators fined it $1.1 million for its rejection of claims by breast cancer patients. The insurer also has been hit with a number of lawsuits by policyholders trying to force the insurance company to pay bills related to experimental treatments.
Under the new policy, upon the request of the member and his or her doctor, Empire will pay to have the case reviewed by independent third-party medical experts. The outside reviewers will be asked to determine the effectiveness of the experimental treatment. Empire said it will be bound by the reviewer’s decision when permitted by contracts.
Currently, Empire’s medical utilization management team routinely reviews requests for experimental or investigational treatments and external review is only done on a case-by-case basis. Empire provides health insurance coverage for more than 4.7 million indemnity and managed care subscribers.
Times Union, Albany, NY, Jan. 29, 1997
Each month, this page features selected short items about state
health-care policy digested from newspapers around the country.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles
both enjoyable and insightful. For information on new subscriptions, product
trials, alternative billing arrangements or group and site discounts please call
800-688-2421. We look forward to having you as a long-term member of the Relias
Media community.
