N.Y. tries to overturn veto. Sens. Alfonse D'Amato (R-N.Y.) and Daniel Patrick Moynihan (D-N.Y.) introduced legislation last week to overturn President Clinton's historic line-item veto of some of New York's Medicaid funding. Clinton complained the Medicaid provision authored by D'Amato and included in the federal budget bill with Moynihan's support would give New York special treatment and require taxpayers elsewhere to subsidize healthcare in the state. The provision would have validated certain provider taxes the state used to inflate its share of federal Medicaid contributions. The state contends the veto will cost it $2.6 billion in Medicaid payments; the federal government says it will only cost New York $200 million.
Eye-care PPM evaluates strategy. Physicians Resource Group said last week it has hired Goldman, Sachs & Co. to investigate ways to maximize shareholder value, including a possible sale of the company. Dallas-based PRG is the nation's leading provider of physician practice management services to ophthalmic and optometric practices. Its shares have been trading around $10, down from an all-time high of $35 in April 1996. PRG said the reduced share price has retarded its acquisition pace. It reported flat earnings of $3.6 million, or 12 cents per share, for the second quarter ended June 30, on revenues of $107 million. As of June, it managed 160 practices and ambulatory centers with 637 doctors in 25 states.
Pa. home-care firm to increase credit facility. King of Prussia, Pa.-based Home Health Corporation of America said last week it plans to increase its $100 million senior credit facility to $125 million in anticipation of an upcoming acquisition. It said it thus far has secured an additional $10 million from one lender and is negotiating with its others for the rest. A spokesman said the company still is in negotiations with an unnamed acquisition target but hopes it will "not be long" before an agreement is reached. Home Health operates 62 home-care branch offices in 11 states.
GE Medical buys maintenance firm. General Electric Medical Systems, Milwaukee, has acquired Steris Corp.'s management services division, which provides maintenance for a variety of clinical medical equipment. Financial terms were not disclosed. Mentor, Ohio-based Steris will continue to service infection prevention and surgical support equipment, its core business lines. Under a three-year agreement, Steris also will maintain infection prevention equipment that GE Medical Systems is responsible for under multivendor service contracts.
VHA awards major outsourcing contracts. VHA has signed five-year outsourcing agreements with Marriott Management Services, Avon, Conn.; Morrison Health Care, Atlanta; and Crothall Healthcare and Crothall Facilities Management of Media, Pa. In effect since Sept. 1, the agreements cover food and nutrition services, housekeeping, laundry, plant operations and maintenance services. VHA said the contracts are expected to generate $560 million in business over five years, doubling the Irving, Texas-based alliance's patient-support outsourcing volume.
Beckman buys fellow devicemaker. Beckman Instruments last week reached a definitive agreement to acquire privately held Coulter Corp., Miami, for $875 million in cash and $175 million in assumed debt. Subject to customary closing conditions, the deal is expected to take place in the fourth quarter. The new company would be called Beckman Coulter. Coulter manufactures clinical laboratory equipment and had 1996 sales of $700 million. Fullerton, Calif.-based Beckman, which had $1 billion in 1996 sales, also makes clinical lab equipment.
NLRB sues FPA over Tucson fight. The National Labor Relations Board has taken San Diego-based FPA Medical Management to court for refusing to negotiate with a physician union at its Thomas-Davis Medical Centers in Tucson, Ariz. A hearing is scheduled for this week in U.S. District Court in Tucson. The NLRB has requested an injunction to force FPA to honor employment conditions that were in effect when clinic physicians voted 93-32 to associate with the Federation of Physicians and Dentists in January. FPA maintains the salaried doctors are not entitled to bargain collectively because they are supervisors.