As part of its stepped-up enforcement of rules for tax-exempt bonds, the Internal Revenue Service late last week proposed a set of guidelines to be used by its agents in auditing municipal financing arrangements. The audits are intended to ensure that bond proceeds are spent and invested properly. If the requirements for tax-exempt bonds are not met, interest received on the bonds must be included in bondholders' gross income. The IRS may recover any unpaid tax on that interest. In most cases, bond-issuing authorities will be responsible for responding to agents' requests for information. The IRS will accept written comments on the proposal for 60 days.
Managed-care plans will be paid as much as 9% more for Medicare patients next year, sources familiar with the formula HCFA uses to set the update said late last week. HCFA was expected to make an official announcement last week but had not done so at press time. If rates do increase as much as speculated, it would be the largest increase in the past three years. The yearly increase is based on a formula that is meant to approximate 95% of the amount Medicare spends on an average fee-for-service beneficiary.
Birmingham, Ala.-based MedPartners agreed to acquire the assets of Melbourne (Fla.) Internal Medicine Associates, a multispecialty group of 43 physicians in family practice, internal medicine and neurology. Terms of the deal weren't disclosed. The clinic is the largest in Brevard County, Fla., and the largest internal medicine practice on the state's east coast, MedPartners said. The acquisition brings MedPartners' doctor count in Florida to 190 and expands its presence in central Florida.
HCFA late last week approved the state of Nevada's waiver application to alter its Medicaid program to a managed-care system. HCFA approved the waiver application in 90 days to the relief of Nevada officials. With the waiver in hand the state can move forward with its plan to enroll 60,000 Medicaid recipients in HMOs by Jan. 1. At least three HMOs will be chosen through a competitive bid process to provide coverage to the beneficiaries. The Legislature this year approved a two-year, $317 million budget for Medicaid.
The former administrator of the now-closed Psychiatric Institute of Fort Worth (Texas) pleaded guilty to a felony charge of making false statements to Medicare. William Robert Wilson Jr. also admitted paying physicians to admit patients to his hospital, which had been one of the most profitable psychiatric facilities owned by National Medical Enterprises. NME has changed its name to Tenet Healthcare Corp. and sold off its psychiatric business. Wilson has yet to be sentenced but could face up to five years in prison and a fine of as much as $250,000. He could not be reached for comment.
The Department of Veterans Affairs medical budget for fiscal 1995 will be reduced by $50 million and VA construction reserve funds will be reduced by an additional $31 million under the spending-reduction bill signed into law by President Clinton. Several rural health programs would be cut by a total of $8 million. Clinton had vetoed an earlier version of the bill, but after weeks of negotiations a compromise was reached last week. Meanwhile, the Ryan White CARE , which is designed to funnel federal funds to hospitals and cities that have been hardest hit by the AIDS epidemic, survived a critical test when the Senate voted 97-3 last week to extend the life of the program through 2000. Both houses of Congress still must vote on funding for the program. The White House 1996 budget calls for a $90 million increase in funding to $723 million.
Three Milwaukee-area hospitals sponsored by the Daughters of Charity National Health System-East Central and Columbia Health System, which includes a secular not-for-profit hospital, completed a merger last week. Columbia Hospital, a 339-bed facility in Milwaukee, will combine management and operations and share future capital purchases and operating income with the Catholic Daughters of Charity hospitals: 331-bed St. Mary's Hospital, Milwaukee; 114-bed St. Mary's Hospital Ozaukee, Mequon, Wis.; and 60-bed St. Mary's Hill Hospital, Milwaukee. All of the hospitals will retain their own assets.