Wound-care firm settles case. A wound-care company related to hospital giant HCA will pay $16.5 million to settle civil fraud charges, the U.S. attorney's office in New York announced. The agreement, signed by Hauppauge, N.Y.-based Curative Health Services, resolves two whistleblower lawsuits filed under the False Claims Act. The company was accused of causing hospitals to disguise marketing expenses as management fees on Medicare cost reports from 1993 to 1998. Curative operates wound-care centers at 125 hospitals, including 25 owned by Nashville-based HCA. Curative did not admit legal guilt. Related suits are pending against HCA, alleging that the hospital company paid Curative for patient referrals. HCA spokesman Jeffrey Prescott said the settlement will have little impact on HCA's case.
Good, bad news for Tenet. Tenet Healthcare Corp., Santa Barbara, Calif., reported better operating results, with operating income up 26.3% for its fiscal 2002 second quarter ended Nov. 30, 2001. But earnings were lower than the year-ago quarter because of charges related to debt refinancing and the planned closures of two of its 116 hospitals. Tenet earned $678 million on operations in the second quarter of this fiscal year, compared with $537 million on operations in the year-ago quarter. Net income was $89 million, or 26 cents per share, compared with $175 million, or 54 cents per share, in the year-ago quarter. Revenue rose 17.2% to $3.4 billion. The company said its 166-bed St. Luke Medical Center, Pasadena, Calif., is expected to close by April. The other hospital due to close was not identified.
Doc group to get tax refund. An Arizona judge ruled that a county tax assessor erred in questioning the charitable status of a physician group affiliated with the University of Arizona College of Medicine. The judge ordered Pima County, Ariz., to refund $312,000 in property taxes collected for 2000 and 2001. University Physicians, Tucson, a group of about 370 doctors, treats "afflicted" people as defined by state charity statutes, said Maricopa County Superior Judge Paul Katz, although the group does not provide more indigent care than other physician practices. The group's attorney said it provides about $7 million per year in uncompensated care as well as significant Medicaid services. Pima County Assessor Rick Lyons called the decision "faulty," but the county has not decided whether to appeal.
Memorial Hermann CEO to retire. Dan Wilford, who has been president and CEO of Memorial Hermann Healthcare System, Houston, since its creation in 1997, will retire Nov. 1. The search for a successor is expected to last up to six months. Wilford, 61, led three-hospital Memorial Healthcare System for 13 years before its merger with Hermann Hospital.
Judge upholds Blues sale. A judge in Maine upheld a pending sale of Blue Cross and Blue Shield of Maine to insurance giant Anthem, Indianapolis. Opponents had argued that Maine Insurance Superintendent Alessandro Iuppa miscalculated the value of the Blues assets. Iuppa had lowered his valuation of the Blues to $82 million from $102 million, reducing the amount of money Anthem would be required to pay to a charitable healthcare trust. A local consumer group and the state attorney general appealed the valuation in August 2001.
Three hospitals to break up. The three hospitals that make up not-for-profit Genesis Hospital System, Huntington, W.Va., have agreed to disband their 4-year-old affiliation. The Pallotine Missionary Sisters, which sponsors 403-bed St. Mary's Hospital, Huntington, asked for the move in October 2001, citing the church's increased emphasis on religious directives that prohibit Catholic hospitals from providing elective sterilization services, said Brent Marsteller, executive director of 293-bed Cabell Huntington Hospital. Cabell is a member of Genesis; the third partner is 201-bed Pleasant Valley Hospital, Point Pleasant, W.Va.
PacifiCare to slash 1,300 jobs. PacifiCare Health Systems, Santa Ana, Calif., will eliminate 1,300 jobs, or 15% of its workforce, partly because of a new computing services outsourcing contract expected to save the company $80 million to $90 million annually. The insurer said it would take a pretax charge of $60 million, resulting in an unspecified loss for the recently ended fourth quarter, but the company forecast a profit of $3.55 to $3.65 per share in 2002, including the benefits of an accounting change.
GAO reports on drug cards. Prescription drug discount cards save consumers about 10% from retail prices, according to a study released by the Government Accounting Office. The study was requested by Democratic congressmen critical of President Bush's proposal for a discount drug card program for Medicare. Bush said last year that the cards would save seniors from 15% to 25% on drug costs.