Kaiser Permanente has shut down inpatient care at its hospital in Richmond, Calif., in response to a critical validation survey by state and federal officials following several patient deaths. Kaiser reportedly failed to fulfill five federal requirements for participation in Medicare and received a termination notice from HCFA. HCFA shared its survey results with Kaiser but won't release them before Kaiser prepares a formal response. The government gave Kaiser until May 7 to fix the problems. Meanwhile, Texas Attorney General Dan Morales asked the insurance director to revoke Kaiser's license to operate in that state, citing concerns about its solvency (April 7, p. 4).
Two more top executives of Towers Financial Corp. late last week were indicted on federal fraud charges in an alleged $270 million scam against investors. Mitchell Brater, 54, Towers' former vice chairman, pleaded not guilty to charges of conspiracy, fraud, obstruction of justice and perjury in connection with the sale of notes to investors. Former General Counsel Michael Rosoff, 47, who was accused of submitting false documents to the Securities and Exchange Commission, will be arraigned later. Earlier this year, Steven Hoffenberg, Towers' former chairman and chief executive officer, was sentenced to 20 years in jail and ordered to pay $462.6 million in restitution and a
$1 million fine for his part in the alleged scam.
A Washington state bill that would regulate the sale of not-for-profit hospitals to for-profit organizations, which has wide support from health officials and consumer groups, was given new life late last week. After dying in a House committee, the bill has become an amendment to legislation that requires public disclosure of information about complaints against hospitals when a case is completed. The disclosure bill was sponsored by the state health department and has the support of the Washington State Hospital Association. The association had succeeded in getting an earlier sales bill tabled after it was expanded to apply to all buyers of not-for-profit hospitals.