Florida Gov. Jeb Bush's plan to move Medicaid beneficiaries into private managed-care plans won approval from Florida's Legislature in a special session. The bill, which awaits Bush's signature, authorizes a one-year pilot program starting July 1 in two counties as well as subsequent analysis of the program. It calls for the program to be expanded statewide by 2011. Federal officials would have to clear future expansion. Under the program, most Medicaid enrollees would switch to managed-care plans or provider service networks or opt out and use Medicaid money to buy private insurance. Alan Levine, secretary of Florida's Agency for Health Care Administration, said in a conference call it was wrong to describe the initiative as privatization, saying the new program "was no more privatized than the system we have today." Levine said private hospitals and physicians already provide the care; the difference is now they will share more financial risk with the state.
CFO pleads guilty to fraud
A former chief financial officer at Bon Secours Cottage Health Services, Grosse Pointe, Mich., pleaded guilty to a single count of criminal wire fraud, admitting that he overstated earnings at the two-hospital system by $117 million over five years to qualify for bonuses and incentives. David Zilli, 48, signed a plea agreement acknowledging he falsified monthly financial journal entries submitted to Bon Secours Health System, Marriottsville, Md., which owns Cottage Health in a joint venture with Henry Ford Health System, Detroit. Zilli received $144,000 in bonuses for the falsely improved earnings. As part of his plea in U.S. District Court in Baltimore, Zilli agreed not to serve as CFO, vice president of finance or in any similar function at any company or organization. A judge must approve the plea deal. In November, Zilli agreed to pay $144,000 to settle a civil accounting fraud complaint by the Securities and Exchange Commission but did not admit wrongdoing.
Legacy names new CEO
Five-hospital Legacy Health System, Portland, Ore., named Lee Domanico as its new president and chief executive officer, effective Jan. 1, 2006. He replaces Robert Pallari, who retired Oct. 1 after a 16-year career at the system. Domanico, 53, is currently CEO at 320-bed El Camino Hospital, Mountain View, Calif. He previously was senior vice president at Tenet Healthcare Corp.'s eight-hospital Pennsylvania region.
Pa. offers hospital loan program
Pennsylvania launched a loan program to lower hospitals' borrowing costs for capital improvements by bundling several hospital projects into composite bond offerings, thus spreading fixed issuance expenses over several participants. The state treasury department invested $50 million in the Hospital Enhancement Loan Program and will use a competitive evaluation process to select technology and facility-improvement projects for participation. The minimum loan will be $3 million, with no maximum. The department expects to issue two composite bond offerings in 2006.