Vencor, CNA to launch insurance product. Louisville, Ky.-based Vencor said last week it has partnered with Chicago-based CNA to launch a long-term-care insurance product later this year. Under the agreement, CNA, a managed-care insurance company, will administer, market and underwrite the product. Vencor will provide utilization review services and reinsure 50% of the risk through a wholly owned subsidiary. Under development for the past three years, the product will offer discounts for services provided by the 314 skilled-nursing facilities Vencor owns and more than 1,000 facilities that contract with Vencor to provide therapy services.
HHS issues fraud advisory opinion. HHS' inspector general's office last week issued its first advisory opinion under a law passed last year that requires federal officials to tell providers if a deal they are considering runs afoul of various federal fraud statutes. The American Kidney Foundation and six unnamed companies that provide kidney dialysis services requested the opinion. The inspector general said it's acceptable for the foundation to pay the health costs of some needy patients even though it is partly funded by kidney dialysis providers. The agency said such payments would not influence the patients' choice of dialysis provider. Federal law bars any form of remuneration to induce Medicare or Medicaid patient referrals.
Ohio system, hospital make deal. MedCenter Hospital in Marion, Ohio, will be purchased by Columbus, Ohio-based Mount Carmel Health System for $15 million and leased back to a for-profit joint venture under a deal approved last week by the board of the hospital's parent, Ohio MedCenter Foundation. Equal owners in the three-way joint venture will be Mount Carmel, the foundation and Marion-area physicians, according to a hospital spokeswoman. The deal is expected to be completed by the end of the summer.
Brown chosen as AHA chairman-elect. The American Hospital Association's nominations committee has selected Fred Brown, president and chief executive officer of BJC Health System of St. Louis, as the next chairman-elect of the AHA's board. Brown was the only executive in the running (Jan. 6, p. 24). If elected by the AHA's House of Delegates, Brown would become chairman-elect in January 1998 and chairman the following year. This year's chairman is Reginald Ballantyne III, president of PMH Health Resources in Phoenix. John King, president and CEO of Legacy Health System in Portland, Ore., is chairman-elect.
MedAmerica, EMA form alliance. MedAmerica, an Oakland, Calif.-based physician practice management company specializing in emergency care, has formed a strategic alliance with Livingston, N.J.-based Emergency Medical Associates. EMA provides emergency department management and staffing for 12 hospital ERs and three primary-care sites in New Jersey. MedAmerica will provide practice management services to EMA's 145 physicians. Terms were not disclosed. MedAmerica, with projected 1997 revenues of more than $140 million, said the deal with EMA signals the beginning of a national expansion strategy. Most of its business is currently in California and Utah.
Nebraska curbs CON law. Nebraska ended its right to review most acute-care hospital projects with a sharp curtailment of its 18-year-old certificate-of-need law. But the state instituted a moratorium on new acute-care beds until September 1999 and will require review of new ambulatory surgery centers in certain counties until January 1999. After that, only plans for long-term-care and rehabilitation beds will continue to require state approval. The Nebraska Legislature passed the measure on a 37-5 vote earlier this month, and it was signed into law late last week. It takes effect in September. Several hospital projects subsequently will go forward. Those include the proposed merger of Bryan Memorial Hospital and Lincoln General Hospital, both in Lincoln, and a $5 million remodeling of Douglas County Hospital in Omaha.