Healthcare Companies

Medicare lab test pilot on hold

Tue, 15 Apr 2008 06:59:56 -0400

Medicare has been forced to put a pilot program designed to cut the cost of lab tests on hold after losing a battle in court. CMS had asked labs to bid competitively on prices to provide 303 standard tests to Medicare patients in San Diego County, but three healthcare companies objected and filed suit to stop the program. The companies--Sharp Healthcare, Internist Laboratory and Scripps Health--contended that they'd be forced to cut their workforce and slash medical services if they lost their guaranteed Medicare lab test income. Now, the agency is pondering its options. It's not clear whether it will go ahead with a redesigned pilot of some kind, or drop the idea entirely.

To learn more about the pilot and the controversy:
- read this Associated Press article

Related Articles:
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State stops acquisition by growing CA hospital chain

Wed, 11 Jul 2007 20:01:36 -0400

Earlier this week, we told you about the growing California hospital empire controlled by cardiologist Dr. Prem Reddy. Victorville, Calif.-based Prime Healthcare Services, which has made its mark with its insurance-free business model, has picked up eight California hospitals in recent times, drawing much attention and some opposition. Now, questions about the chain have stopped its next planned acquisition. State officials have nixed its attempt to buy non-profit Anaheim Memorial Medical, one of the largest medical centers in its region.

Anaheim's parent company, Memorial Health Services, had accepted a roughly $55 million bid for the 217-bed hospital in February. But in a nearly unheard of move, the state attorney intervened to cancel the deal, saying the proposed buy wasn't good for the region and didn't come with a high enough pricetag. The AG's office also said it was uncomfortable with the bidding process for acquiring the facility, which went up for sale about a year ago. Prime has said it intends to keep pursuing the deal, and is willing to participate in a new, alternative bidding process.

To learn more about the proposed deal:
- read this Los Angeles Times article

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BC of California faces hearing on complaints

Tue, 10 Jul 2007 20:01:38 -0400

Over the past three years the state of California has logged more than 1,600 consumer, physician and hospital complaints about Blue Cross of California (BCC) business practices. Sparked by these complaints, the state's Department of Managed Health Care (DMHC) now plans to hold a public hearing to look at whether the Blue plan has kept promises it made when it was acquired in 2004 by WellPoint. The hearing, which will take place next week, follows a Department of Insurance report contending WellPoint unit BC Life & Health improperly revoked nearly 2,000 individual policies in 2004 and 2005.

When WellPoint acquired Blue Cross of California in 2004, state regulators made WellPoint promise it wouldn't use BCC's premium revenues to pay for the acquisition or finance executive payouts. (Regulators and critics were unhappy about a planned executive payment of up to $600 million.) Now, the plan is cutting physician fees while raising premiums, according to the California Medical Association. The DMHC also is scrutinizing a $950 million payment BCC made to WellPoint this spring to determine whether the payment violates the terms of the buyout deal.

To find out more about the hearing:
- read this Los Angeles Times piece

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Pediatric stent-maker faces FDA investigation

Thu, 05 Jul 2007 20:01:38 -0400

A company that makes coronary stents and catheters for pediatric use is facing an investigation by the FDA and federal prosecutors, who contend that it promoted non-approved stents for use in children. They say device maker NuMed sold more than 30 stents to the DuPont Hospital for Children in Wilmington, Del., but didn't file for FDA approval prior to selling the stents as agency regs require. If the FDA investigation moves forward, NuMed ultimately could be banned from selling the devices in the United States, forcing children to go to Europe if they need this device. NuMed also would be forced to pay several million dollars in fines.

Alarmed by the FDA investigation, about 600 cardiologists and parents worldwide have begun circulating a petition asking the agency to drop the NuMed investigation. They say the NuMed products are safer than using adult stents on children, and that stopping their sale could harm young heart patients substantially.

To learn more about the investigation:
- read this United Press International piece
- and this Wall Street Journal report

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Manor Care goes private in $6.3B deal

Mon, 02 Jul 2007 20:01:38 -0400

The Carlyle Group is taking national skilled nursing and assisted living facility operator Manor Care private in a $6.3 billion deal that pays stockholders $67 per share. The chain operates 278 skilled nursing facilities and 65 assisted living centers across the United States. The equity firm is paying out roughly $4.9 billion in cash, and will also assume $1.4 billion in debt.

The Manor Care deal follows the recent $1.43 billion acquisition of nursing home operator Genesis HealthCare by a consortium of investors. Analysts say both deals were triggered by the perception that elder care-oriented businesses can only get more valuable as the baby boomer generation continues to age.

To find out more about the deal:
- read this Dayton Business Journal piece
- read this article in The Baltimore Sun

Related Article:
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Small buy means big change for Tenet

Sun, 01 Jul 2007 20:01:38 -0400

Picking up a single 41-bed hospital usually isn't a big deal for a hospital chain the size of Tenet. But in this case, its acquisition of Hardeeville, S.C.-based Coastal Carolina Medical Center is a significant move, as it's Tenet's first acquisition in five years after years of focusing on existing properties. Executives with Tenet say the $35 million acquisition is a significant step for the company, which has been in turnaround mode for four years.

Tenet is only just emerging from a thicket of legal troubles. A year ago, it agreed to pay $900 million to settle Medicare fraud charges. Three months ago, it agreed to pay $10 million to settle similar challenges from the Securities and Exchange Commission. Now, execs need to turn a profit. The company has lost money every year between 2003 and 2006, including an $800 million loss last year.

To find out more about Tenet's plans:
- read this article from The Dallas Morning News

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California hospital system launches pro-reform ads

Sun, 01 Jul 2007 20:01:35 -0400

Catholic Healthcare West (CHW) has begun running a series of ads advocating healthcare reform in California. The health system, which operates 42 hospitals in California, Arizona and Nevada, plans to run print ads in several national and regional publications, including the Wall Street Journal, New York Times and Newsweek. The ads don't detail a specific reform scheme, but rather, agitate for broad healthcare accessibility. CHW also belongs to a pro-reform healthcare coalition, Together for Health Care, that includes employers, providers, health plans, unions and consumer groups.

Meanwhile, it's worth noting that CHW provided $800 million in charity care, community benefits and unreimbursed care last year. Though it's unlikely to say so publicly, CHW doubtless hopes a reform scheme will reduce that amount in the future.

To find out more about the campaign:
- read this article from the Silicon Valley/San Jose Business Journal

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HealthSouth's Scrushy going to jail

Thu, 28 Jun 2007 20:01:38 -0400

It's the end of the line for high-profile healthcare exec Richard Scrushy, who was sentenced to almost seven years in prison yesterday for his conviction on federal bribery charges. Scrushy, who now runs a church out of a television studio, continues to deny wrongdoing.

Unlike peers involved in similar scandals at Enron, WorldCom and Tyco, Scrushy actually managed to beat federal charges resulting from the spectacular $2.6 billion accounting fraud at HealthSouth. But Scrushy lost the other case against him, in which federal prosecutors alleged he bribed former Alabama governor Don Siegelman. (Siegelman got jail time, too, as part of the same sentencing.) In addition to serving his sentence, Scrushy will have to pay $417,000 in fines and restitution, serve three years of probation and perform 500 hours of community service once he is released.

To find out more about Scrushy's situation:
- read this article from The Boston Globe

PLUS: If you still haven't had enough Scrushy despite his years in the limelight, check out this documentary on YouTube. Video

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WellPoint named in sexual-battery suit

Thu, 28 Jun 2007 20:01:36 -0400

And the steamy plot gets thicker. A month after it kicked out Wall Street darling David Colby as CFO, WellPoint was named as a defendant in a suit accusing Colby of varied nasty misdeeds, including sexual battery.

Prior to his dismissal from WellPoint, Colby earned a $740,000 salary and had been awarded stock options worth about $1.7 million at the time. He's since sold $100 million plus of WellPoint stock.

In the suit, former employee Sarah Waugh says Colby maintained relationships with her and (brace yourself) 15 other women. Her suit contends WellPoint should have acted to protect her from Colby, who, she contends, apparently engaged in high-risk intimate practices which spread STDs to his partners. Instead, she says, WellPoint actually helped him maintain this lifestyle by arranging personal and business trips for Colby's paramours.

As lurid as this tale is, it's not the only romantic misdeed being laid at Colby's doorstep. Just before he was dismissed, another girlfriend filed suit demanding Colby give her a $4.4 million house as promised. And did we mention that at last report, he was still married to his second wife?

To read more about Colby's legal troubles:
- read this Los Angeles Times article

St. Barnabas racketeering suit dismissed

Wed, 27 Jun 2007 20:01:37 -0400

Despite its having engaged in a massive Medicare scam costing the federal government at least $630 million, St. Barnabas Health Care System did not prevent other hospitals from getting fair reimbursement.

That's the conclusion of a federal judge, who ruled that despite the fraud, St. Barnabas had not engaged in racketeering. Two small hospitals in Maine and Colorado filed the suit, alleging St. Barnabas' over billing was so extreme it distorted CMS's Medicare reimbursement formulas nationwide. (St. Barnabas had been involved in a scheme to inflate reported costs for its most expensive procedures and thereby increase billings.) The hospitals contended St. Barnabas' actions led to thousands of facilities losing more than $500 million in federal money. The judge, however, ruled the government was the only victim of the health system's actions. When St. Barnabas agreed to repay $265 million, even that damage was mitigated.

To find out more about the case:
- read this article in The New York Times (reg. req.)

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