The pending $16.4 billion merger of Anthem and WellPoint Health Networks cleared a significant hurdle only to run into another potential roadblock. The deal was approved by California's Department of Managed Health Care. At deadline, the insurers said they expected the California Department of Insurance to deny approval of the deal, rejecting their offer to plow $465 million into programs for the state's poor and uninsured over 20 years. Both departments must approve the part of the deal that involves WellPoint's 7 million-member Blue Cross of California subsidiary in order for it to proceed. So far, the merger has been approved by the Justice Department, both companies' shareholders and regulators in 10 of the 11 states that have a direct say in the deal. Anthem and WellPoint said they would carefully review California Insurance Commissioner John Garamendi's anticipated decision and respond promptly.
Senate OKs error-reporting bill
The Senate unanimously passed a bill that would set up a confidential, voluntary system of reporting medical errors. Under the bill, doctors and hospitals would be able to report medical errors without fear of being sued. The stated goal of the Patient Safety and Quality Improvement Act is to encourage providers to report errors so they can be analyzed by patient safety organizations to produce better procedures and safety protocols. The bill must now be reconciled with the House version, passed in March 2003.
CMS offers immigrant plan
The CMS proposed a plan to distribute extra payments to hospitals that treat a large number of illegal immigrants in their emergency rooms, carrying out a provision of last year's Medicare reform law. The Medicare law set aside $1 billion over four years to help hospitals absorb the cost of treating illegal immigrants, with $250 million to be distributed annually from 2005 through 2008. Under the CMS proposal, hospitals would have to document the number of illegal immigrants they treat in order to receive funds. That would involve asking all patients their citizenship status. Two-thirds of the money would be allocated based on each state's estimated share of the nation's undocumented immigrants. The remaining third would go to the six states with the largest number of undocumented immigrant apprehensions: California, Texas, Arizona, New York, Illinois and Florida. The CMS would make quarterly payments directly to individual hospitals, which could begin submitting claims Jan. 1, 2005. The CMS is accepting comments on the plan through Aug. 16 and hopes to issue a final version by Sept. 1.
HCA names finance officer
HCA, Nashville, promoted R. Milton Johnson to executive vice president and chief financial officer, a newly created position for the company, which has not had a CFO since 1995. Johnson, 47, had been senior vice president and controller at HCA since 1998, and his association with the company and its spin-off HealthTrust dates to 1982. In the past, Jack Bovender Jr., HCA's chairman and CEO, has downplayed the importance of a CFO. What's changed is the increasing scrutiny of financial reporting and the demand for transparency in that area, HCA spokesman Jeff Prescott said, citing the Sarbanes-Oxley Act. HCA also named A. Bruce Moore Jr. chief operating officer of its outpatient services group, which was created earlier this year. Moore, 44, has worked for HCA since 1982, most recently as senior vice president of operations administration.