The American Hospital Association's nine regional policy boards met in Chicago last week to review the finishing touches on major strategic moves by the 99-year-old Chicago-based association, including a name change. The AHA's board is expected to approve at its January meeting a plan to allow integrated delivery systems to join the association as members. Systems now participate in the AHA by virtue of having one or more hospitals as members. A name change by the AHA will be considered next year, when it celebrates its centennial.
The Illinois Supreme Court ruled late last week that hospitals can directly employ physicians to provide medical services. The decision reverses a lower-court ruling that 174-bed Sarah Bush Lincoln Health System, Mattoon, Ill., violated the state's prohibition against the corporate practice of medicine when it hired Richard Berlin Jr., M.D., to practice medicine. The high court ruled that a licensed hospital is an exception to the corporate practice of medicine doctrine. It also sent the case back to the circuit court to decide the merits of Berlin's employment agreement. The case started when Berlin resigned from Sarah Bush Lincoln in 1994 and went to practice at a nearby clinic. The hospital said he had broken the noncompete clause in his employment contract. Berlin said the contract terms were unenforceable because Illinois law doesn't permit hospitals to employ doctors.
U.S. District Court Judge Barbara Crabb in Madison, Wis., on Friday approved a proposed settlement of three patient class-action antitrust lawsuits against Marshfield (Wis.) Clinic. Under the settlement, Marshfield agreed to pay $4 million to settle the now-consolidated lawsuits, which accused Marshfield of conspiring to eliminate competition among physicians in north-central Wisconsin. About $2.5 million will go to pay the plaintiffs' attorneys; the balance will be used to finance healthcare for low-income residents in eight Wisconsin counties. An estimated 200,000 people covered by the suits have until Nov. 28 to object to the terms of the agreement.
The Visiting Nurse Service of Greater Woonsocket (R.I.) filed suit against Landmark Medical Center in Woonsocket late last week, after talks to unwind their affiliation unexpectedly broke down. The VNS filed suit in state Superior Court in Providence after the hospital allegedly failed to give the 300-employee organization legal notice concerning Landmark's contract to be bought by Tenet Healthcare Corp., Santa Barbara, Calif. Landmark has 20 days to respond to the suit.
The Federal Trade Commission late last week launched an antitrust investigation into drug distribution giant McKesson Corp.'s planned $2.3 billion purchase of AmeriSource Health Corp. The companies said the FTC made a second request for information about the deal, which was announced Sept. 23. San Francisco-based McKesson and Valley Forge, Pa.-based AmeriSource said they will cooperate.
A New Jersey appellate court ruled on Friday that Blue Cross and Blue Shield of New Jersey is a charitable organization. The decision affirms an earlier bench ruling by a New Jersey Superior Court judge that led to the collapse of the plan's proposed merger with Indianapolis-based Anthem Insurance Cos. (March 31, p. 3). The Newark-based Blues plan expressed disappointment in the appellate court decision and has directed its attorneys to appeal the case to the state Supreme Court. Officials said they had hoped for an interpretive ruling of the law on which both rulings are based.
The Mayo Clinic and Rockford (Ill.) Health System called off their proposed affiliation Friday. Talks between the pair were halted after a disagreement on how tight the partnership should be. Last month the two sides downgraded their 8-month-old merger negotiations to affiliation talks (Sept. 8, p. 16).
HCFA should be able to run its Medicare+Choice beneficiary information program for less than $50 million a year, about a fourth of what HCFA said it would cost, according to a study commissioned by several managed-care plans. The study is expected to be released this week. Meanwhile, Congress is likely to give HCFA about $95 million to run the program next year, according to congressional aides.