Health Midwest seeks advice
Health Midwest, Kansas City, Mo., filed petitions in Cole County (Mo.) Circuit Court and Johnson County (Kan.) District Court seeking guidance on the system's proposed $1.1 billion sale to HCA, Nashville, and what to do with the proceeds. Health Midwest said public hearings conducted by the attorneys general of Kansas and Missouri have brought forth dozens of plans, many of them contradictory, for the estimated $800 million healthcare foundation expected to result from the sale. The petitions seek to clarify the fiduciary responsibilities of Health Midwest's board regarding the proceeds, the system said.
Tenet critics take aim
Labor-backed critics of Tenet Healthcare Corp., Santa Barbara, Calif., took aim at the company as it continued to face questions about its high Medicare outlier reimbursements. The California Nurses Association and the Institute for Health and Socio-Economic Policy released a study that said Tenet's hospitals marked up the costs of drugs by more than double the average markup for U.S. hospitals. Meanwhile, the Coalition for Quality Health Care, which includes the Service Employees International Union, asked California Attorney General Bill Lockyer to block the sale of 60-bed University of Southern California-Norris Comprehensive Cancer Center and Hospital to Tenet, arguing that other bidders might pay more. Tenet has agreed to pay $35 million in two installments for the center, the coalition said. Tenet spokesman Harry Anderson said in both cases the critics are motivated by their adversarial bargaining relationships with the company.
HealthSouth plans layoffs
HealthSouth Corp., Birmingham, Ala., plans a 2% reduction in its workforce, or about 1,000 jobs, over the next few months, primarily in administrative and support positions. The layoffs are part of a corporate initiative to reduce costs in response to a projected $175 million decline in 2003 operating earnings. The company said in August a Medicare policy clarification regarding group and individual outpatient therapy would result in a significant decline in earnings. HealthSouth operates about 1,800 imaging, surgery and rehabilitation facilities in the U.S. and abroad.
Cigna settles docs' lawsuit
Cigna Corp.'s healthcare division in Bloomfield, Conn., said it has settled a class-action lawsuit filed by physicians and other healthcare providers alleging that the insurer shortchanged them. Cigna said it would take an after-tax charge of up to $65 million in the fourth quarter to reflect the settlement. The actual settlement-which plaintiffs' attorneys have estimated at $200 million-depends on how many providers participate. Cigna agreed to appoint a third-party administrator to review claims denied since Jan. 1, 1996; to establish a $10 million "prompt pay" fund to compensate providers for late payments; and to change several practices to help doctors do business with the company. The settlement requires court approval.