Medicare reimbursement to rural hospitals will increase by 4.7% beginning Oct. 1, making the base payments to those facilities the same as small urban hospitals for fiscal 1995. The payments mark a first for rural hospitals, which have received lower reimbursement than urban hospitals since the beginning of the Medicare program. Large urban hospitals-those in metropolitan areas with populations of more than 1 million-will continue to receive a higher base rate level from Medicare. Payments to all urban hospitals will increase 1.5% for the 1995 fiscal year. HCFA had estimated the 1995 percentage increases in May; the final amounts were printed in the Federal Register last week. The rate increases will go to approximately 5,200 hospitals, including 2,300 rural and 2,900 urban.
Medical Care America shareholders last week approved an $850 million acquisition of the company by Columbia/HCA Healthcare Corp. However, the companies are still awaiting antitrust clearance. Last month, the Federal Trade Commission requested more information on two markets in which both companies operate facilities. The deal unites Louisville, Ky.-based Columbia/HCA, the nation's largest hospital chain, with Dallas-based Medical Care, the country's largest outpatient surgery center chain. The acquisition is expected to be completed in mid-September.
Irving (Texas) Healthcare System's board voted last week to affiliate with Baylor Health Care System, Dallas. Irving received 15 proposals from organizations interested in an affiliation, but it had narrowed the field to Baylor; Columbia/HCA Healthcare Corp., Louisville, Ky.; and Harris Methodist Health System, Fort Worth, Texas. Located between Fort Worth and Dallas, the not-for-profit system, which is anchored by a 288-bed hospital, was viewed as an asset to all three bidders in their efforts to build integrated networks in the urban area of 3 million. Terms of the affiliation will be worked out within the next two months, executives said.
Healthtrust-The Hospital Co. last week purchased 107-bed Great Plains Hospital, a psychiatric hospital in Lawton, Okla., from National Medical Enterprises. The hospital's operations will be consolidated into Southwestern Medical Center in Lawton, Okla., which is also owned by Healthtrust. Sheilah O'Heaney, Southwestern's director of marketing and strategic planning, said the hospital will continue to operate Great Plains as a psychiatric facility, but may convert some of the beds for rehabilitation patients. Nashville, Tenn.-based Healthtrust operates 118 hospitals, five of which are in Oklahoma.
With the departure of Thomas Kinser as executive vice president and chief operating officer of the national Blue Cross and Blue Shield Association this week, the group is searching for replacements for its two top executives. Mr. Kinser has been named chief executive officer of Blue Cross and Blue Shield of Tennessee. Before joining the national association in December 1991 he had been CEO at Blue Cross and Blue Shield of Georgia. Bernard Tresnowski, the association's president and CEO, will retire on Dec. 31. The changes come at a time when Blues plans have come under fire by lawmakers and regulators for alleged financial instability and misuse of funds by executives.
Columbia/HCA Healthcare Corp. last week completed its joint venture with 359-bed Rapides Regional Medical Center, Alexandria, La. Terms weren't disclosed. Columbia/HCA (See related stories, p. 6) and Rapides will own a new five-hospital system called Central Louisiana Healthcare System. James T. Montgomery, Rapides' chief executive officer, also will serve as CEO of the new system.
The U.S. Justice Department and the Arizona attorney general's office filed and settled antitrust charges last week against an Arizona dental plan that required dentists to give it the same discounts it gives other insurers. Such a requirement, known as a "most-favored-nation" clause, is often used by insurers that want the best discounts. The clause used by the Delta Dental Plan of Arizona hurt consumers because it limited discounts that dentists may have offered other insurers as well as patients, the agencies said. The settlement requires the plan to eliminate the clause and refrain from any activity that may limit discounting.