DOC-OWNED HOSPITAL CLOSES. A physician-owned hospital in Chicago closed abruptly and filed for bankruptcy in April after months of financial struggle and intense federal scrutiny. Opthamologist James Desnick, M.D., the head of Doctors Hospital of Hyde Park, promised to pay hospital employees $600,000 in back pay out of his own pocket.
Desnick, who in 1992 led the group of private investors that purchased Doctors Hospital out of bankruptcy, is no stranger to controversy. Desnick was previously the founder and head of Eyecare of America, which he sold in 1994 after it was investigated by federal authorities for fraudulent billing. But just a year later, his medical license was suspended by the state of Illinois, and he agreed to pay $100,000 to settle charges related to his eye center business. In 1997, Florida put his medical license on probation for similar reasons.
Last year, Doctors Hospital agreed to pay $4.5 million to settle charges that it fraudulently billed the federal government.
DOCS MAKE BID FOR HOSPITAL. Meanwhile, in Portland, Ore., a group of physicians is looking to purchase two hospitals. After Nashville, Tenn.-based New American Healthcare filed for bankruptcy protection for Eastmoreland and Woodland Park Hospitals last month, a group of doctors and private investors made an offer to purchase the facilities, according to the Business Journal of Portland.
Hospital spokeswoman Dianne Danowski Smith would not confirm who the buyers were but did confirm a letter of intent has been signed.
UCONN DOCS LOOK TO UNIONIZE. Doctors at the University of Connecticut Health Center will likely make another run at forming a union this year, but health center administrators have declined a union request that they remain neutral toward any organizing activities.
Union organizers working with the American Federation of State, County and Municipal Employees asked the UConn Board of Trustees April 11 for a neutrality stance. Last June, doctors voted 250 to 169 to oppose forming a union. There are 484 employees eligible to vote in any union election. The election last year grew from frustration over increasing financial problems at the health center.
The health center--including UConn's medical and dental schools--is facing a $21 million budget deficit this year.
AETNA SUED AGAIN. Aetna is facing another lawsuit, this time accusing one of its health plans of using nonphysicians or unqualified physicians to determine medical necessity.
The suit was filed April 11 in U.S. District Court in New Jersey on behalf of all participants or beneficiaries in employee benefit plans who have received their health insurance through PruCare. In August, Aetna acquired Prudential's healthcare business.
The case alleges, among other things, that PruCare breached the terms of its health plans by determining what was medically necessary by using procedures that are "inconsistent or conflict with generally accepted medical standards," according to a statement.
Aetna officials are reviewing the suit, says spokesman David Carter. "It appears to be a another attempt . . . to make fundamental changes in the way healthcare plans are governed," he says.
ILLINOIS SOCIETY DUMPS AMA. The Illinois State Medical Society voted last month to deunify from the AMA. The vote, which came at the ISMS' annual House of Delegates meeting, means that society members are not automatic members of the AMA. Previously, any physician that joined the ISMS or their local county medical society automatically became a dues-paying member of the AMA. ISMS and the AMA have maintained a unified membership status since the early 1950s.
"We heard the voices of our members," says ISMS President Clair Callan, M.D. "They told us in no uncertain terms they want the freedom to choose. Now they have that choice."
BCBS WILL PAY DOCS. After protests by the Massachusetts Medical Society, officials at Blue Cross and Blue Shield of Massachusetts last month stepped back from their decision to refuse to pay doctors who conduct longer, more expensive visits with patients.
On Feb. 1, the state's largest insurance company began denying extra payments to 1,400 doctors for treating patients in 40 to 80 minute office visits that cost between $38 and $50.
The MMS claimed the Blues assumed physicians were dishonest.
The insurer insisted the care could have been given in shorter visits. Blue Cross chief medical officer Kurt Sligar, M.D., told the Boston Globe that the company didn't adopt the policy to save money but to ensure "appropriate" patient care. He did acknowledge a financial aspect to the decision.
