Albuquerque, N.M.-based Horizon/CMS Healthcare Corp. said the U.S. Justice Department has concluded its Medicare billing investigation into a subsidiary of the company and has taken no action. The long-term-care provider said it received confirmation from the U.S. attorneys' offices in Sacramento, Calif., and Harrisburg, Pa., that they have concluded their investigations of Continental Medical Systems, which became a wholly owned subsidiary of the company in July 1995. CMS first became aware of the probe when Justice Department officials made surprise visits in October 1994 at more than half of its rehabilitation hospitals and questioned employees about its Medicare billing practices. Horizon/CMS provides long-term-care services through 120 owned or leased facilities and 142 managed facilities in 18 states. It also operates 37 acute rehabilitation hospitals in 16 states, 58 specialty hospitals and subacute-care units in 17 states, and more than 150 outpatient rehabilitation clinics in 21 states.
Baptist Medical Center in Kansas City, Mo., is under investigation by the FBI for Medicare fraud, according to a report in the Kansas City Business Journal. Authorities are looking into allegations that Baptist paid a physician group to get patient referrals. Federal officials wouldn't comment on the report. A hospital spokesman called the report "rumor, gossip, conjecture, innuendo" and said Baptist has not been notified that it's the subject of any investigation. The probe is part of an ongoing investigation of 30 cases in the Kansas City area on which seven FBI agents are working full time. Bethany Medical Center in Kansas City, Kan., recently paid $1.2 million to settle allegations that it paid for referrals from the same group, which is now defunct.
Some Department of Veterans Affairs hospitals would receive Medicare reimbursement for treating Medicare-eligible beneficiaries under a pilot program proposed in legislation sent last week to Congress. The demonstration would assess whether Medicare reimbursement of VA hospitals could improve healthcare quality and access for Medicare-eligible veterans without increasing Medicare costs. The VA has sought such reimbursement in the past, but the Treasury Department has resisted it.
Charles M. Balch, M.D., has been named president and chief executive officer of City of Hope National Medical Center in Duarte, Calif., effective Sept. 1. Balch, 53, is executive vice president for health affairs and professor of surgery at University of Texas M.D. Anderson Cancer Center in Houston. He is an internationally known oncologic surgeon specializing in treating breast cancer and malignant melanoma and a prominent researcher in immunology. Balch led Anderson's efforts to negotiate managed-care contracts, increasing that business more than 200% in the past three years.
Two not-for-profit Rochester, N.Y., hospitals signed a memorandum of understanding to discuss forming a new healthcare system that would become an affiliate of Daughters of Charity National Health System-East. Plans call for Park Ridge Health System, parent of 259-bed Park Ridge Hospital, and St. Mary's Hospital, a 227-bed facility sponsored by DCNHS-East, to jointly operate through a holding company governed by one board of directors. The venture, being called St. Mary's/Park Ridge Health System, would have combined assets of $180 million and annual revenues of some $230 million. It would bring to three the number of systems forming in the Rochester market.
California lawmakers have rejected a bill requiring 48-hour minimum hospital stays for mothers and newborns in the state, where the tumult over so-called "drive-through deliveries" began. The California Assembly Appropriations Committee voted against the bill, which is similar to legislation passed in 28 other states. An internal memo from Kaiser's Sunset Medical Center in Los Angeles obtained last summer by a consumer group sparked the national furor. The memo directed staff to encourage women who have normal vaginal deliveries to go home after eight hours. Kaiser and other HMOs have maintained that such decisions are ultimately left to doctors and that government shouldn't interfere.
Deerfield, Ill.-based MMI Cos. reported a 12.5% increase in net income to $6.3 million, or 62 cents per share, for the second quarter ended June 30. That compares with net income of $5.6 million, or 60 cents per share, in the year-ago quarter. Revenues rose 12% to $58.9 million. For the six months, MMI reported a 38% increase in net income to $13.8 million, or $1.28 per share, from $10 million, or $1.07 per share, in the year-ago period. Revenues grew 11% to $131.4 million. In a separate announcement, the healthcare risk management and insurance company said it has filed a registration statement with the Securities and Exchange Commission for a proposal to offer 1.25 million shares that will be sold by the company and another 958,000 shares to be sold by stockholders.