University of Pittsburgh Medical Center Health System is attacking Pittsburgh-based Highmark Blue Cross and Blue Shield's proposed loan to bail out troubled West Penn Allegheny Health System. UPMC filed suit Feb. 16 in Commonwealth Court in Harrisburg, Pa., charging that the loan's terms violate Pennsylvania insurance law. A below-market interest rate gives the loan an actual value of $183 million instead of the $125 million that Highmark claims, according to the suit. The $183 million exceeds state limits, the suit says. A Highmark spokesman said company officials already discussed loan details with state regulators. West Penn Allegheny is to receive the loan after it refinances debt next month.
A federal judge in White Plains, N.Y., has set a June 5 date to begin the antitrust trial of two Poughkeepsie, N.Y., hospitals accused of price fixing. The state of New York sued the hospitals in 1998, saying their 8-year-old joint operating agreement was nothing more than a sham company to allow two competitors to fix prices (Feb. 16, 1998, p. 3). The hospitals, the only acute-care facilities in Poughkeepsie, are 252-bed Vassar Brothers Hospital and 314-bed Saint Francis Hospital. The hospitals say they are merged institutions incapable of conspiring with each other.
The American Medical Association has joined the Medical Association of Georgia in filing a class-action lawsuit against Aetna U.S. Healthcare of Georgia. The suit, filed in Fulton County Superior Court in Atlanta, accuses Aetna of violating state law requiring that healthcare claims be paid within 15 working days. It asks for an injunction and a declaration that such conduct is illegal.
Georgia's insurance commissioner has fined Aetna U.S. Healthcare of Georgia $50,000 and ordered the company to pay refunds to more than 700 Georgia customers for raising HMO rates without state permission. An Aetna spokesman said the company thought it could raise rates pending regulatory approval and would promptly refund customers. Aetna filed for permission to raise its HMO rates in April and implemented the increase in July. The company reinstituted its previous rates in September after the state said it didn't have permission to raise rates.
In separate settlements, 282-bed Hamilton Medical Center, Dalton, Ga., will pay $1.3 million and 77-bed Harrison Memorial Hospital, Cynthiana, Ky., will pay $605,000 to resolve allegations that they overbilled Medicare for patients suffering from pneumonia. Neither hospital admitted wrongdoing. The settlements are the latest in an ongoing national investigation into pneumonia Medicare upcoding by hospitals.
Three more hospitals have settled charges of "patient dumping" without admitting guilt. Legacy Good Samaritan Hospital and Medical Center, a 294-bed hospital in Portland, Ore., paid a $125,000 fine for allegedly failing to screen eight patients in its emergency room. Meanwhile, 200-bed Doctors Hospital of Hyde Park, Chicago, paid $39,000 for allegedly failing to screen three patients and failing to appropriately transfer a psychiatric patient. And 95-bed Crittenden Memorial Hospital, West Memphis, Ark., paid $15,000 to resolve charges that it failed to screen one patient.