AUSTIN, Texas- A new Texas law updates the state's 1999 prompt-pay legislation and closes loopholes that hospitals said let health plans delay payments to providers. Gov. Rick Perry signed the law at the Texas Hospital Association's annual conference last week in Austin. The law creates graduated penalties for health plans violating the 30-day payment deadline for electronic claims and the 45-day deadline for paper claims. It also establishes a "safe harbor" for health plans that pay 98% of claims on time and a 95-day filing deadline for providers to submit claims.
DALLAS-Texas has become the latest state to enact a law that limits damages in medical malpractice cases. Gov. Rick Perry visited six cities earlier this month to ceremonially sign a bill that caps noneconomic damages, or pain-and-suffering awards, at $250,000 for physicians, $250,000 for hospitals and $250,000 for nursing homes. The law establishes a maximum award of $750,000 per claimant. Perry's office described the legislation as "historic," saying it would ensure that all Texans have access to healthcare. But the law, similar to legislation overturned in 1988 by the state Supreme Court, still faces a significant hurdle: In September, Texas voters must approve the reform bill as an amendment to the Texas Constitution.
LAREDO, Texas-Community Health Systems, Brentwood, Tenn., earlier this month signed a letter of intent to buy 312-bed Mercy Health Center, Laredo, according to the seller, Sisters of Mercy Health System, St. Louis. Terms were not disclosed. Subject to regulatory approvals, the deal is expected to close this fall. Unlike many sales of not-for-profit hospitals to investor-owned chains, the Mercy sale was not triggered by substantial future capital needs. The hospital was built in 1999 as a replacement facility. In a written statement, Sisters of Mercy President and Chief Executive Officer Ron Ashworth said the system couldn't continue to run the hospital with poor reimbursement from government programs, the rising cost of malpractice coverage and competition from for-profit specialty hospitals. To be on equal footing with competitors, the hospital needs to be under for-profit management, Ashworth said. Community already owns or operates eight Texas hospitals among the 70 hospitals it owns or operates in 22 states.
DALLAS-The Federal Trade Commission announced a consent agreement earlier this month barring not-for-profit Southwest Physician Associate from collectively bargaining fees or other competitively significant contract terms on behalf of its 1,000 physician members. The consent agreement is effective for 20 years. The FTC alleged that instead of acting as simply a messenger to deliver contract terms from insurers to physicians, the organization implemented agreements on prices and other contract terms and failed to inform members of offers it considered insufficient. At deadline, Southwest Physician officials could not be reached for comment.
BATON ROUGE, La.-The Louisiana Hospital Association earlier this month lost a bid to impose a moratorium on new hospital licenses despite face-to-face lobbying of state legislators and what it called a massive e-mail campaign. The LHA cited opposition from the Louisiana State Medical Society in the defeat of an amendment in the state House of Representatives aimed at halting the growth of physician-owned specialty hospitals. The LHA said the defeat marks the end of its efforts to "deal with the niche hospital issue at the state level." It will continue to work on regulatory reform.
PARIS, Texas-Christus Health, Irving, Texas, is seeking a buyer for Christus St. Joseph's Health System in Paris, two years after acquiring a monopoly in the market. Christus cited physician and community resistance to service consolidations. The two-hospital St. Joseph's system has been losing from $500,000 to $1 million per month for the past two years and is budgeted to lose $5 million in fiscal 2004, which starts July 1, Christus spokeswoman Linda McClung said late last month. Christus bought 160-bed McCuistion Regional Medical Center, Paris, from Texas Health Resources in 2001 for an undisclosed price. It previously owned 200-bed Christus St. Joseph's Hospital, the town's only other acute-care facility. Christus said it hopes to identify a buyer for the system by September.
BATON ROUGE, La.-The Louisiana Senate late last month approved by a 36-2 vote a law that for the first time would allow state public hospitals to charge some patients-those with incomes above 200% of the federal poverty level-and to adjust their budgets without state approval. If approved in its current form, the measure would eliminate a 77-year-old law that guarantees medical care for any state resident, regardless of income or insurance, at any of the state's public hospitals. About 85% of the system's patients are uninsured or on Medicaid. People with higher incomes would be billed on a sliding scale. Louisiana State University, which assumed management of the state public hospital system in 1997, has been lobbying for more financial and management flexibility for two years.
WASHINGTON-Georgetown University Hospital said late last month it would close its cardiac surgery center this summer and transfer services to Washington Hospital Center. Both facilities are owned by MedStar Health, Columbia, Md. Georgetown, which has 609 licensed beds, cited a declining need for cardiac surgeries for the closure. Last year, the center performed about 250 surgeries while Washington Hospital performed 2,200. Cardiac center staff at Georgetown will remain at the hospital and be moved to other units.
KENDALL, Fla.-Four-hospital Baptist Health South Florida, Coral Gables, and Kendall Regional Medical Center, both of which operate in the Miami-Dade region, are seeking state permission for a combined $745 million in capital projects. Baptist plans about $510 million in projects, including a new 80-bed hospital in Kendall and a replacement for Homestead (Fla.) Hospital. Kendall Regional also has proposed an 80-bed hospital for Kendall.
NASHVILLE-A proposal for a $50 million, 90-bed replacement for Nashville Rehabilitation Hospital was rejected by a 3-5 vote of the Tennessee Health Services and Development Agency board, said the agency's general counsel, Reid Brogden. The hospital has not decided whether to appeal, spokesman Michael Drescher said. During a hearing late last month, one board member noted the rehabilitation hospital could spend up to $5 million on its current facilities without a certificate of need. Drescher said it would be more cost-effective to replace the hospital, whose buildings range in age from 40 years to 65 years. The plan was opposed by most of Nashville's acute-care hospitals. If the replacement hospital is built, it would be owned by a partnership including its current owners as well as Surgical Alliance Corp. and Brentwood Holdings, a Nashville-area investment group. Physician investors would be sought eventually, Drescher said.