AHA study: Federal PSO rules tougher than states'. Proposed federal quality and consumer protection standards for provider-sponsored organizations would be more stringent than those of any state, said a study released last week by the American Hospital Association, which supports federal rather than state regulation of PSOs. PSOs are networks of providers that could directly contract with Medicare for the delivery of care to beneficiaries (See related story, p. 66). The study found that while some states have consumer protection and quality standards that exceed those of the PSO legislation in certain areas, the federal rules were more stringent overall. A spokeswoman for the Blue Cross and Blue Shield Association, which opposes federal regulation of PSOs, said PSOs should be treated like insurance companies and should be regulated at the state level as are HMOs and other managed-care organizations.
Clinton to name Gober VA chief. President Clinton said last week he will nominate Hershel Gober as the next Department of Veterans Affairs secretary. Gober, who has been acting VA secretary since the departure of former Secretary Jesse Brown, would oversee the restructuring and streamlining of one of the nation's largest healthcare systems. Gober, 60, has served as deputy VA secretary since 1993 and before that was veterans affairs director in Arkansas.
Conroy quits Paracelsus board. James A. Conroy, a nonmanagement board director of Paracelsus Healthcare Corp., resigned late last month. Conroy was on a special committee that investigated certain accounting errors made before Houston-based Paracelsus merged last August with Champion Healthcare Corp. Conroy, a partner at Olympus Partners and a former Champion director, said he was unhappy because other panel members didn't want to hold former Paracelsus directors responsible for the errors. Charles R. Miller, Paracelsus' president, said Conroy's resignation may reflect his interest as a former Champion shareholder.
Coram sues Price Waterhouse. Denver-based Coram Healthcare is seeking more than $165 million in damages from Price Waterhouse in a lawsuit filed last week in San Francisco Superior Court. The suit is related to the recently announced settlement of a lawsuit Coram filed against Caremark International, a subsidiary of Birmingham, Ala.-based MedPartners (July 7, p. 24). Coram charged that Caremark overvalued its home infusion unit when it sold the unit to Coram in April 1995. As part of the settlement, Coram won the ability to pursue a lawsuit against Caremark's auditors at Price Waterhouse for certain information they provided regarding the sale.
FPA, Healthsource enter pacts. San Diego-based FPA Medical Management last week announced seven-year agreements with Healthsource to provide services to the HMO's 188,000 enrollees in New Jersey, South Carolina and Texas. The pacts are expected to begin Sept. 1 (See related story, p. 34). Hooksett, N.J.-based Healthsource, which Cigna Corp. recently acquired, will pay FPA capitated rates to provide global services in New Jersey and South Carolina and physician services in Texas.
$1.5 billion credit line for FHS. Woodland Hills, Calif.-based Foundation Health Systems has established a new $1.5 billion revolving line of credit with a syndicate of nine banks, led by Bank of America and Citicorp. The credit line replaces a $700 million facility for the former Health Systems International and two lines worth $500 million for the former Foundation Health. The companies merged to create FHS in April. Previous borrowings have been rolled into the new line, which carries a variable interest rate tied to the London Interbank Offered Rate.
IDX, Phamis complete merger. IDX Systems Corp., a Burlington, Vt.-based healthcare information systems company, last week completed its merger with Phamis, a Seattle-based healthcare info systems firm. The stock swap was valued at about $168 million. Phamis stockholders received 0.73 of a share of IDX common stock for each Phamis share. The companies had combined 1996 revenues of $206 million.