Managed Care Report
Managed Care Report
• Blue Cross and Blue Shield of Tennessee (BCBSTN; Nashville, TN) lost nearly $10 million on its TennCare business in October, and it expects its losses to mount next year unless something is done to fix the program, reported the Tennessean. Some reasons for the loss include a rise in the cost of medical care nationally; growing numbers of TennCare patients with chronic, costly medical conditions; out-of-control drug costs; and, through the recent settlement of a class-action lawsuit, a dramatic expansion of the appeal of rights of TennCare patients who are denied medical services, the company said. BCBSTN currently covers about 639,000 Tenness eans, and by Dec. 1, will have 645,000 members half of all TennCare enrollees and an eighth of the state’s population, BCBSTN said. By law, it cannot accept any more enrollees, the Tennessean reported. The other eight companies that mange benefits for TennCare enrollees are having their own financial problems and are reluctant to increase their caseloads, state officials told the newspaper.
• WellPoint Health Networks (Thousand Oaks, CA) last week announced two key enrollment milestones signifying extraordinary growth for the company. First, WellPoint’s California subsidiary, Blue Cross of California, has reached 5 million members. And second, individual membership among Blue Cross of California and WellPoint’s national subsidiary, Unicare Life & Health Insurance Company, combined has now reached more than 1 million members. The milestones come on the heels of two prominent awards, WellPoint said, including Fortune magazine’s 1999 pronouncement of WellPoint as the most admired healthcare company and the September announcement of CaliforniaCare, Blue Cross of California’s HMO, being named Blue Ribbon HMO by the Pacific Business Group on Health.
• Blue Cross and Blue Shield of South Carolina’s (BCBSSC; Charleston, SC) HMO, HMO Blue, will take over the health insurance coverage of 6,300 people formerly covered by HealthFirst (Greenville, SC), which said last month it was going out of business. The conversion will take place Jan. 1. HealthFirst said in October it would cease operations because the healthcare market wasn’t developing as planned. Also, its Medicaid HMO was hampered by changes in the Medicaid system. The deal will not include 11,000 employees of Greenville Hospital System, Anderson Area Medical Center, and Spartanburg Regional Healthcare System covered by HealthFirst, the company said. They will be covered by their hospitals’ health plans beginning Jan. 1.
• PacifiCare Health Systems (Santa Ana, CA) said last week that its board approved a poison pill plan to protect the company from any hostile takeover bid. The plan would give shareholders the right to acquire shares of common stock or a new preferred stock at a discount if some person or group acquires a stake of 15% or more in the company, reported the Los Angeles Times. PacifiCare said the plan will help shield it from abusive takeover tactics, but was not adopted in response to any current proposals. The plan applies to shareholders of record Nov. 19 and expires after 10 years.
• Aetna U.S. Healthcare (Blue Bell, PA) said a federal court has dismissed claims of fraud and other allegations filed against the company by Coram Healthcare (Denver). The suit involved Coram’s agreement to provide home healthcare services to Aetna U.S. Healthcare members. All claims have been dismissed, except breach of contract.
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