Oxford shake-up. Hoping to rebuild its damaged image and financial standing, troubled Oxford Health Plans says it is searching for a new chief executive officer and has named a temporary chief financial officer.
Current CEO William Sullivan will remain in that position until a replacement is found and then will stay with Oxford in a senior management position. CEO recruitment is being done by Oxford founder and chairman Stephen Wiggins, several board members and executive search firm Spencer Stuart. Spokeswoman Nicole Reilly says the search team will consider only external candidates and may look outside the healthcare industry.
Oxford lost 80% of its stock value last year when devastating third and fourth quarters sent stocks tumbling. Computer error led the plan to underestimate what it owed providers for patient care. The company was then fined $3 million for late claims payment by the New York State Insurance Department, and it agreed to pay $500,000 in restitution to providers and enrollees.
Coastal sells clinics. Coastal Physician Group sold its last 17 freestanding medical clinics, where about 50 physicians practice, to a company affiliated with Coastal Chief Executive Officer Steven M. Scott, M.D.
Scott Medical Group, a privately held company in which Scott is a significant stakeholder, paid $10 million for the clinics, Coastal Chief Financial Officer Charles Kuoni III said. Scott founded Durham, N.C.-based Coastal in 1977.
Coastal, once the physician-practice-management darling of Wall Street, now consists of its emergency-physician staffing and billing operations, its government-physician staffing division and its HMOs in North Carolina and Florida. Coastal has about 1,700 affiliated physicians. Its stock, once valued at about $40 per share, trades for about $1 per share.
Kuoni says the $10 million will be used to reduce Coastal's debt. During the first nine months of 1997, Coastal lost $48.7 million, compared with a $75 million loss during the same period in 1996.
Joining up. Physician unions continued their slow but steady march into healthcare's mainstream recently when a group of about 50 Las Vegas anesthesiologists and 60 Tampa, Fla., orthopedists joined the Federation of Physicians and Dentists, a Tallahassee, Fla.-based affiliate of the AFL-CIO. The 8,000-member union also is meeting with about 150 other Tampa-area specialists.
However, physician unions are still far from the norm. A recent example: The National Labor Relations Board in Philadelphia rejected a labor union's request to represent a group of New Jersey physicians in negotiations with an HMO.
Unions like the FPD can represent fee-for-service physicians as a third-party negotiator, but current antitrust laws prohibit independent contractors from collective bargaining. The New Jersey physicians would have been the first private-practice physicians to gain that right.
Arthur Nahas, D.O., who led the union charge with his brother Frederic Nahas, M.D., says he is disappointed and New Jersey physicians plan to appeal to the national NLRB in Washington. "Our feeling is that the (local) NLRB wanted to punt in regard to making a decision because of the magnitude of this decision. We're not happy, naturally, but we're working on an appeal right now." (October, page 3; December, page 4).
Dialing for telemedicine dollars. About $140 million in state and federal funds were allocated to the development of U.S. telemedicine programs in 1997, according to a study by Syracuse, N.Y.-based communications consulting firm Hezel Associates.
Major medical universities and state information networks received the bulk of that funding, according to the study.
The biggest spender was the National Library of Medicine, which awarded 19 multi-year grants totaling $42 million. Iowa's National Laboratory for the Study of Rural Telemedicine received $7.25 million of that total, according to the study.
Hezel's study did not include a proposal by the Federal Communications Commission to spend up to $400 million annually for network upgrades related to telemedicine.
Under investigation. The Justice Department is taking its Medicare fraud investigation out of medical offices and into the streets -- and restaurants and homes of healthcare workers.
FBI agents are conducting impromptu interviews with healthcare workers, according to Lisa Murtha, director of the control and compliance practice in the Philadelphia office of the consulting firm Deloitte & Touche. Murtha says FBI agents are using "surprise tactics" and undercover methods to pressure workers into turning over evidence. "It's usually done to scare people," Murtha says. "A lot of people don't know what their rights are."
Assistant U.S. Attorney James Sheehan, who has made fraud investigations his top priority, says the FBI is not being sneaky, just thorough. "You don't go to their office when their boss is there. You knock on their door in the night or early in the morning," he says. "The honest person has nothing to fear from the government," he says.
Fraud investigations by the FBI more than tripled between 1992 and 1996, and criminal prosecutions increased to 246 from 83 during the same period (November, page 3).