HMO SUIT SETTLED. The first malpractice lawsuit brought under a 1997 Texas law giving patients the right to sue their HMOs in certain circumstances has been settled. Both sides say the fact the suit was even filed, however, has changed how healthcare is delivered in Texas.
The suit was filed against NYLCare65, which is now owned by Blue Cross Blue Shield of Texas, alleging that its decision to not cover psychiatric inpatient care led to a man killing himself. The family of Joseph Plocica, 68, contended that the man took his life after a discharge from a 13-day stay at a psychiatric hospital. His physician had recommended that the patient not be discharged, but the HMO and its medical director declined to cover the stay.
Terms of the settlement are confidential. Although both parties agreed not to pursue the case, the defendants didn't admit wrongdoing.
Since Texas passed its law, several states have given patients the right to sue and others are considering similar laws (see June, page 52).
PHYSICIAN PAY UP. Physician compensation and gross productivity has generally increased across the country, according to a survey by the American Medical Group Association.
The 2000 Medical Group Compensation & Productivity Survey released last month found that between 1996 and 1999, physicians specializing in urology had a 15.3% increase in compensation, the largest of specialities surveyed. Cardiac/thoracic surgeons had a compensation decrease of 1.54%, the only speciality to have a decline.
Median gross productivity also increased in all categories: Diagnostic radiologists had a 38.63% increase in productivity, the highest of all groups. Urgent care specialists had the lowest increase, 2.82%.
The AMGA's 14th annual compensation and productivity survey contains data from more than 23,750 medical group physicians from around the country.
INSURERS SWAP ENROLLEES. UnitedHealth Group will transfer its 225,000 California health plan enrollees to Blue Shield of California, under an agreement announced last month. Blue Shield also will allow about 700,000 Uniprise enrollees access to its physician network. Uniprise is a wholly owned subsidiary of UnitedHealth Group.
United officials determined that because of the makeup of California's healthcare marketplace--where United ranks as eighth largest--they either needed to grow their enrollment or exit the state, says spokesperson Roger Cruzan. Neither option was appealing so they pursued this route and decided to concentrate on their Uniprise operations, he says.
The transfer primarily involves people covered by UnitedHealthcare, the healthcare arm of UnitedHealth Group. Employees and dependents of large, multisite companies will continue to be served by Uniprise, which plans to expand programs in California through the newly created alliance with Blue Shield.
The transfer, announced July 14, is pending regulatory approval.
CASE THROWN OUT. A federal judge threw out a Minnesota case that alleged the way Medicare managed care dollars are dispersed is unconstitutional.
U.S. District Court Judge Donald Alsop in Minneapolis says that while he agrees the system is unfair, it's a legislative issue, not a judicial one.
In December, Minnesota Attorney General Mike Hatch sued HHS and HCFA alleging that the Medicare+Choice program was unconstitutional. Medicare beneficiaries in Minnesota received fewer benefits under the Medicare+Choice plan than residents of other states.
The state doesn't plan to appeal, says David Aafedt, assistant attorney general.
MERGERS AND ACQUISITIONS UP. Healthcare mergers and acquisitions increased during the second quarter for the first time in two years, according to a report published late last month.
In its report July 21, New Canaan, Conn.-based Irving Levin Associates, a healthcare research firm, found there were 17% more deals in the second quarter than the first quarter, something that hasn't happened in two years. There were 135 mergers and acquisitions in the second quarter of this year compared with 115 mergers and acquisitions in the first quarter.
The hospital sector led the activity with 31 deals, a 41% increase. Physician medical groups accounted for 20 deals, compared with 18 in the first quarter.
Although the number increased over the first quarter, the number of physician medical group mergers and acquisitions was down by more than 50% compared with the same time last year. Last year there were more mergers in the first quarter than in the second.
The managed care sector had a 50% decrease in activity from the first quarter this year.
"This stems from two concerns that diverted insurers' attention from the M&A programs: how the Supreme Court would rule on lawsuits against HMOs and preparations to withdraw from many Medicare markets," says Sanford Steever, editor of the report.