New Mexico last week received its Medicaid waiver from the Clinton administration, allowing it to begin enrollment of its Medicaid recipients into commercial health plans. The state had announced earlier this spring that three private providers-Presbyterian Health Plan, Lovelace Health Systems and Cimarron HMO-would handle the enrollment (April 7, p. 28). Some 200,000 of the state's 250,000 Medicaid recipients would begin entering the plans in July, with phase-in completed by late 1998. The program, called Salud (Spanish for "to your health"), is expected to save New Mexico $120 million a year. The state spends $1 billion annually on its Medicaid program.
An attorney for a doctors' group challenging a proposed lease between Medical University of South Carolina and Columbia/HCA Healthcare Corp. has asked for more time to question negotiators involved in the deal. In February 1996, MUSC agreed to lease its three hospitals to Columbia for 30 years in a deal valued at more than $1 billion over the life of the lease. The Medical Society of South Carolina filed suit in August 1996 alleging the deal is an illegal joint venture between the state and a private company. The society owns Roper Health System, an MUSC competitor. A hearing on the case was held in March (March 24, p. 26). The society wants until Sept. 1 to continue gathering information, but MUSC is ready for a decision now. The judge's ruling on the request for an extension is expected soon.
Up to $400 million a year would be available to subsidize telemedicine services for some rural hospitals and other providers after a Federal Communications Commission decision. The FCC voted earlier this month to authorize use of the federal government's "universal service fund," a pool of revenues derived from phone companies and their customers, to support telemedicine services. The money would help upgrade rural telecommunications networks and equalize telemedicine costs between urban hospitals and rural public and not-for-profit providers (April 21, p. 8). Universal service fund revenues will subsidize transmission services up to the "T1" speed-the transmission speed offered by some fiber-optic systems. The fund also will pay for distance charges for T1 connections to the nearest city with at least 50,000 people. It also will pay for up to $180 a month in long-distance charges to connect with Internet-service providers when access to the providers requires a long-distance call.
Diagnostic imaging equipment servicer COHR saw its stock price slide 15% last week, after it said fourth-quarter revenues would fall more than $1 million, or about 6%, shy of analysts' estimates (March 17, p. 35). The Chatsworth, Calif.-based outsourcing company said the expected shortfall for the quarter ending May 29 stems from delays in closing its acquisition of Stryker/Mediquip, realizing revenues under a major new servicing contract and a planned equipment sale. On the day of the announcement, COHR's stock closed down $3.44 at $18.75 on the NASDAQ exchange on volume of 359,800 shares, the highest trading volume in three months.
The American Association of Health Plans will require member plans to involve participating physicians in quality improvement programs, utilization review, practice guidelines and formulary development (May 12, p. 36). The AAHP last week also introduced a standardized physician application form to simplify joining health plans' provider networks. The announcement is another in the AAHP's efforts to improve its image and make consumers more confident of the quality of care that health plans deliver.
Unison HealthCare Corp., a Scottsdale, Ariz.-based long-term-care company, said its pretax loss for the nine months ended Sept. 30, 1996, will be significantly higher than the $5 million to $6 million previously estimated (April 21, p. 28). The company said it plans to report audited financial statements for 1996 within the next two weeks. Unison announced in March that it planned to reduce its pretax earnings by as much as $6 million and its after-tax earnings by $3.6 million, or 93 cents per share. The announcement triggered a class-action shareholder lawsuit and the resignations of top executives and forced its president and chief executive officer, Jerry Walker, to go on administrative leave.