Each month, this page features selected short items about state health-care policy digested from newspapers around the country.
Clip File
Oxford agrees to pay $1 million in interest for late payments to New York physicians and hospitals
NEW YORK—In a precedent-setting pact with New York’s Attorney General Dennis Vacco, Oxford Health Plans has agreed to pay at least $1 million in interest to doctors and hospitals owed an estimated $238 million.
The attorney general began a probe of the HMO in February spurred by complaints from the state Medical Society and the New York State Society of Medical Oncologists and Hematologists that the HMO was late in paying for services; the lag in payment was averaging four months.
At a time when late payments by HMOs increasingly are an issue for health-care providers, officials said the interest penalty would send a strong message to insurers that excessive delays in payment would not be tolerated. Officials said the agreement also would serve as a disincentive for HMOs to hold onto money and use it for interest and investments, although they noted that Oxford has not been accused of the practice, often referred to as taking advantage of "the float."
Oxford admitted to no wrongdoing, but agreed to pay the state $150,000 for the cost of the investigation. The July 25 agreement requires Oxford to pay 9% interest on undisputed claims that are unpaid after 30 days, retroactive to April 1. Oxford, which has 1.2 million customers in New York, must also file written reports that will be reviewed by an outside auditor for one year. The company has maintained that the delays in payments were due to glitches in a new computer systems.
Newsday, Aug. 1, 1997
Tennessee lawmakers challenge short inpatient stays for substance abuse in managed care program
NASHVILLE, TN —Tennessee lawmakers challenged the two firms managing the state’s behavioral health program, TennCare Partners, to explain why they think three to five days of inpatient treatment is sufficient for alcohol and drug abusers. For months, alcohol and drug treatment facilities have complained that the state’s managed care program for mental health and substance abuse, does not allow adequate treatment for addiction.
At a TennCare Oversight Committee hearing, Sen. Robert Rochelle said, the short stays go "against everything I’ve ever known about treating alcohol and drug addicts." Another senator from a rural district said he had received reports of patients having continued relapses probably because "we just don’t have the outpatient support systems we need."
Richard Orndoff, chief manager of Premier Behavioral Systems, one of the two companies, said the treatment format had been approved by the state’s TennCare Bureau and that he would produce medical studies showing that a short residential stay with follow-up outpatient care can be effective. At a recent public hearing, advocates and consumers said families of troubled children are being advised to put their children into the custody of the state’s Department of Children’s Services in order to obtain services.
The Commercial Appeal, Memphis, TN, July 27, July 31, 1997
DC approves managed care contracts for Medicaid
WASHINGTON, D.C—After three false starts, the D.C. Council approved Medicaid managed care contracts for four companies. The Council awarded $214 million worth of contracts to Prudential Health Care Plan, Inc., Capitol Community Health, Inc. and D.C. Chartered Health Plan Inc. The fourth contract, to American Preferred Provider Plan of D.C. Inc., was adopted by a 7-2 vote. Two council members dissented, expressing concerns that the New Jersey-based company has no record of providing medical services in the District. The four plans will cover 80,000 District residents who receive Medicaid benefits. The program is already 15 months behind schedule.
Some council members wanted to delay awarding contracts until after the summer recess so public hearings could be held. But the Marion Barry administration pressed for the contracts, arguing that the city stood to lose $1 million a month in savings if the program did not begin in November and that the city could be in violation of a court order. The managed care contracts were the vehicle for the District to comply with a court order to correct inadequate health screening of children on Medicaid.
The Washington Post, Aug. 1, 1997
Nebraska county drops suit against woman
on fraud over state-paid abortion
CRAWFORD, NE—Five months after it filed suit, Dawes County has dropped its case against a young woman who received a state-paid abortion after she said she became pregnant following a rape. The case was apparently the first of its kind.
The Nebraska county, which charged the young woman with fraud and false reporting, said it was dropping the case because it was "not appropriate at this time." The complaint states that while she claimed her pregnancy was caused by a rape, she did not press criminal charges against the man she said had raped her.
The Medicaid beneficiary’s lawyer said the law does not require women to notify police to qualify for a Medicaid-funded abortion.
Nebraska has taken an aggressive pro-life stance on Medicaid-funded abortions, risking the loss of $390 million in federal Medicaid money when it refused to pay for abortions caused by rape or incest as required under the 1994 Hyde amendment.
New York Times, Aug. 2, 1997, Inquirer, Philadelphia, Aug 8, 1997
Mass. hospitals and HMOs lack policies on drug treatment for exposure to AIDS virus, survey says
BOSTON—The AIDS Action Committee of Massachusetts reports that virtually none of the hospitals and health plans surveyed recently had a set policy on drug treatment for exposure to the AIDS virus. The US Centers for Disease Control and Prevention is preparing federal guidelines on drug treatment to prevent infection following exposure to the AIDS virus. The eight hospitals and seven managed care organizations surveyed by the AIDS Action Committee all said they evaluate patients seeking treatment for exposure to the AIDS virus on a case-by-case basis. AIDS specialists said the absence of a policy on post-exposure treatment underscores the need for federal guidance on the issue.
Boston Globe, July 24, 1997
New England states pass hospital acquisition laws
BOSTON—Limits on purchases of hospitals by for-profit companies have recently been put in place in Rhode Island and New Hampshire and are being proposed in Massachusetts. The combined impact of the legislation in three states—if Massachusetts passes a bill—could hamper HCA/Columbia’s strategy of acquiring a chain of hospitals in New England.
The Rhode Island legislature overrode a governor veto to put in place limits on for-profit company purchases of hospitals. For-profit companies that acquire a hospital must wait three years before acquiring another one. New Hampshire’s governor recently signed a law that makes it more difficult to change control in charitable trusts, including hospitals.
In Massachusetts, the Senate Ways and Means Committee approved a bill that would ban all for-profit companies from buying hospitals until full regulatory oversight is in place. The bill would impose a moratorium on acquisitions and also toughen regulation of mergers between nonprofit hospitals and between health maintenance organizations.
HCA/Columbia has plans to purchase the Roger Williams Medical Center in Providence and the Neponset Valley Health System as well as other hospitals in Massachusetts.
The Massachusetts bill would: require 90 days’ notice to the Department of Public Health of all sales or mergers between health care organizations; disclosure of buyout packages or other benefits to hospital executives as a result of a merger; require public hearings 45 days before a merger; and require that the same level of free care be provided after the change in ownership.
A spokesman for the Massachusetts Hospital Association said the state already has an extensive review process and that the proposed regulation is unnecessary.
Boston Globe, July 24, 1997
Some buyers of long-term-care insurance policies should not be buying them, says Mass. study
BOSTON— Insurers are selling long-term-care insurance policies to people who would probably be covered by Medicaid if they had to go to a nursing home, concludes a recently released report by the Massachusetts Division of Insurance. In a survey of major life insurance companies that sell long-term-care insurance in Massachusetts, the Division found that 11 of 19 companies did not use prospective customers’ income and assets as guidelines for determining who should buy the coverage.
"I’d be concerned that people are purchasing this and maybe their money should be spent on other things," Michael Urbach, a health analyst for the insurance division told the Boston Globe. "Consumers who consider long-term care policies need to consider them as part of a broader financial plan for their futures."
Ginny Bueno, a spokeswoman for the American Council of Life Insurance, refuted the report, saying financial factors are a top priority for insurance agents. "We, as an industry, are committed to insure the right product is sold to the right individual."
The number of Massachusetts residents who purchased policies reached 41,335 in 1996, up from 27,381 policies in 1994.
Boston Globe, July 29, 1997
Anthem Blue Cross and United Health Care pull out of Kentucky’s embattled purchasing alliance
FRANKFORT, KY—The state’s purchasing alliance has been too tough a negotiator, say two insurers, Anthem Blue Cross/Blue Shield and United HealthCare. The two carriers announced they are pulling out of the alliance, .citing losses and pressure from alliance officials to keep insurance rates low.
United HealthCare said it had to charge customers outside the alliance 30% more to meet the alliance’s rate demands.
"We really felt uncomfortable with what we’d have to charge our other clients," Chief Executive Officer Bud Fisher told the Lexington Herald-Leader.
Anthem has 37,000 policies through the alliance and United HealthCare, 15,000 policies.
Anthem has been scaling back its participation in the alliance since 1996, when it stopped offering its popular Option 2000 plan. The plan allowed people to use the doctors of their choice for certain services. Anthem withdrew the plan after alliance officials said the rates were too high. The number of people on Anthem plans has dropped from 60,000 to 37,000. More recently, Anthem has been negotiating to withdraw more plans from the alliance, including its statewide preferred provider organization, which was selected by 80% of its alliance policyholders.
Anthem’s pull-out is expected to have the largest impact on rural counties. Two other carriers—Healthsource, based in Louisville, and Owensboro Community Health Plan, doing business as Medquest/Trover—will join the alliance, making it possible for residents in some counties to have a choice of at least two accountable health plans.
Lexington Herald-Leader, July 30, 1997
Infants who stay in the hospital at least 30 hours after birth are less likely to be rehospitalized
SEATTLE—A large University of Washington study has found that newborns who stay in the hospital for more than 30 hours are less likely to end up back in the hospital. The study of more than 310,000 births in Washington state between 1991 and 1994 found that newborns released from the hospital less than 30 hours after birth were 28% more likely to be rehospitalized within a week than healthy babies who stayed in the hospital longer.
The Journal of the American Medical Association (JAMA) article reported that the infants of some groups of mothers were at more risk. First-time mothers, those under 18 years old and mothers who had premature rupture of membranes during delivery were even more likely to have their babies rehospitalized.
Another JAMA article in the same issue reported that there was no significant difference in rehospitalization for feeding-related problems between those infants released within 48 hours and those who stayed longer. An accompanying article concluded that a postpartum stay of 24 hours and a stay of 48 hours is unlikely to be a critical factor in newborn or maternal health. More important are the services received and the timing of those services.
Seattle Post Intelligencer, July 23, 1997
Each month, this page features selected short items about state health-care policy digested from newspapers around the country.
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