Medicare `cost-bundling' demo planned. A three-hospital system in New Jersey and five other hospitals in New Jersey, New York and Pennsylvania will participate in a three-year HCFA demonstration of bundled Medicare payments for hospital and physician inpatient services. Officials said the program aims to encourage physician-hospital organizations to collaborate to provide care more efficiently. They said bundled payments typically will reflect a 5% discount on the total physician and hospital fees Medicare had been paying. HCFA Administrator Bruce Vladeck said improvements in the fee-for-service payment formula are important to the future of Medicare because many beneficiaries will remain in the fee-for-service sector. Also, Medicare managed-care capitation rates still are tied to local fee-for-service costs.
States' kid-care grants published. HCFA last week published a state-by-state breakdown of the distribution of $4.3 billion in federal children's healthcare grants next year. The allotments reflect the number of uninsured children living in the state who are at or below 200% of the federal poverty level. California, with 1.3 million children who qualify, will receive the biggest grant, $854.9 million. The money will be available to states throughout federal fiscal 1998, which begins Oct. 1, even if they do not have a children's healthcare coverage plan approved.
Senate passes HHS spending bill. The Senate last week passed a bill funding HHS for fiscal 1998 in a 92-8 vote. The legislation, providing almost $24 billion for HHS, recommends a $72.8 million reduction in spending for health professions training to $220 million. The Agency for Health Care Policy and Research would endure a small cut to $142.6 million, while the budget for Medicare claims processing contractors would increase by $75.8 million to $1.7 billion. In addition, $1 million would fund a U.S.-Mexico Border Health Commission, which would work with Mexico to improve health, air and water quality along the border.
HHS recommends patient-record law. HHS last week recommended Congress pass a law requiring providers to notify patients in writing of their practices for handling patient records and to maintain a history of what records have been disclosed to whom. HHS Secretary Donna Shalala also is recommending strict controls over the disclosure of confidential patient information, as well as criminal penalties and civil liabilities for those who unlawfully access and/or disclose confidential records. The recommendations call on Congress to restrict the disclosure of confidential patient data among providers, payers and practitioners to the minimum necessary to accomplish the purpose for which the data are requested.
Jones retiring as Humana CEO. David A. Jones, 66, will retire as Humana's chief executive officer but remain as the HMO's chairman, the company said last week. Jones founded Louisville, Ky.-based Humana in 1961 along with the late Wendell Cherry. It's now one of the nation's five largest managed-care companies. Gregory H. Wolf, 40, Humana's president and chief operating officer, will become president and CEO. Both moves are effective Jan. 1, 1998.
Mecklenburg interim chief of Northwestern network. Gary Mecklenburg, president and chief executive officer of Northwestern Memorial Hospital in Chicago, was appointed last week to be interim president and CEO of Northwestern Healthcare Network, an integrated delivery system in the Chicago area. Mecklenburg, 51, who will continue to serve as head of Northwestern Memorial, replaces Bruce Spivey, M.D., who is leaving Oct. 1 to run a New York City physician group (Aug. 18, p. 19). Mecklenburg was the network's founding president and CEO. A national search for a permanent replacement for Spivey is under way.
HealthSouth to buy ASC Network. Birmingham, Ala.-based HealthSouth Corp., the nation's largest rehabilitation provider, agreed to buy Newport Beach, Calif.-based ASC Network Corp. for $130 million in cash and $50 million in debt assumption. Controlling interest in ASC, one of the nation's largest independent operators of outpatient surgery centers with 29 locations in eight states, is held by McCown De Leeuw & Co., a New York and Menlo Park, Calif.-based investment firm.