The boards of 268-bed Queen of the Valley Hospital in West Covina, Calif., and 217-bed Inter-Community Medical Center in Covina, Calif., have signed a definitive agreement to merge both hospitals and rename the merged organization Citrus Valley Health Partners. Although details of the agreement haven't been completed, executives expect to complete the deal on April 29. Peter E. Makowski, Queen of the Valley's president and chief executive officer, has been tapped to serve as CEO of Citrus Valley Health; Maureen L. O'Conner, Inter-Community's president and CEO, has been named the new system's executive vice president.
Incarnate Word Health Services has awarded a five-year, $75 million contract to Mundelein, Ill.-based Medline Industries. Under the contract, Medline will manage the distribution of supplies to seven of the system's nine hospitals. The supplier has promised to save the hospitals $7.5 million during the life of the contract by cutting supply and materials management costs. Incarnate Word, based in San Antonio, Texas, operates nine hospitals with 1,759 staffed beds, according to MODERN HEALTHCARE's 1993 Multi-unit Providers Survey (May 24, 1993, p. 36).
Nashville, Tenn.-based PhyCor last week filed a registration statement with the Securities and Exchange Commission regarding its proposed public offering in April of 2.15 million shares of common stock, including 150,000 shares offered by some of its major shareholders. Proceeds from the offering, expected to total $65.5 million, will be used to repay bank debt, acquire additional multispecialty medical clinics, expand operations at existing clinics and make other investments. Alex Brown & Sons in Baltimore and Robertson, Stephens & Co. in San Francisco are the transaction's managing underwriters. PhyCor operates 19 multispecialty medical clinics in 12 states. Its stock is traded on the NASDAQ market.
Two clinical laboratory chains agreed last week to pay $1.1 million to settle charges that they submitted false claims for services to military dependents. The chains, Corning's MetPath division and Unilab Corp., were accused of performing tests that hadn't been requested and masking the charges, the U.S. Justice Department said. Corning is based in Corning, N.Y. Unilab, based in Tarzana, Calif., once was part of MetPath. Last September, the companies paid $39.8 million to settle similar charges (Sept. 20, 1993, p. 19). The settlements are part of an extensive federal probe of the $30 billion laboratory industry. Industry experts have said that hospital laboratories could gain a competitive edge because of the stain on competitors' reputations. However, they could fall victim to the same scrutiny (Sept. 13, 1993, p. 23).
Drug distributor McKesson Corp. has agreed to pay $765,000 to settle charges that it submitted allegedly false claims to Oregon's Medicaid program. Federal prosecutors charged that the company's 3PM division, a third-party biller for Medicaid claims, had submitted 353,000 allegedly false claims and received $461,000 in overpayments. McKesson said the errors were caused by a problem in its computer software, which was corrected as soon as it was discovered. The excess payments went to pharmacies. The San Francisco-based company said it agreed to the settlement rather than force pharmacies to reimburse the government.
Meditrust, the Waltham, Mass.-based real estate investment trust, announced the sale of $90 million of 7.5% convertible debentures last week. Proceeds from the sale will be used to pay off debt. The debentures may be converted to shares of Meditrust stock at $36.18 per share. On the day before the announcement, its shares closed at $33.50. Meditrust has investments in 213 healthcare facilities in 33 states.
New guidelines for treating cancer pain were released last week by HHS' Agency for Health Care Policy and Research, Bethesda, Md. The cancer guidelines, part of a series of clinical standards being developed through the federal agency, were developed by a 26-member panel. The panel's co-chairman, Richard Payne, M.D., director of the pain and symptom management section at the University of Texas of M.D. Anderson Cancer Center, said pain in cancer patients traditionally has been undertreated, especially for the elderly, children and minorities. The new guidelines are designed to help physicians and other clinicians assess and manage pain. More than 8 million Americans now have or have had cancer, the agency reported. An estimated 1.2 million cases will be diagnosed in 1994.