HHS rejected a proposal from New York health officials that would have expanded its childrens health insurance program to cover youngsters in families that earn up to four times the federal poverty level. In May, New York officials proposed to HHS that it effectively allow children in families that earn more than $80,000 per year to be covered under its State Childrens Health Insurance Program, a move that would conflict with recently implemented CMS directives limiting SCHIP growth. New York Gov. Eliot Spitzer railed against the administrations decision and reiterated his threat of legal action.
UnitedHealth Group and Sierra Health Services received approval from Californias insurance commissioner to move ahead with their $2.6 billion merger. California was the last of three states to grant approval. The Nevada Division of Insurance granted approval last month after a series of hearings this past summer, and Arizona quickly followed suit. The Justice Department must still approve the deal. The Nevada attorney general is still reviewing the terms of the deal and has the option of filing a lawsuit to block it.
Tenet Healthcare Corp., Dallas, announced a new head of its Florida region at the same time that its 11 hospitals in South Florida announced nearly 350 layoffs. Marsha Powers was named senior vice president of operations and will be based in South Florida, effective Sept. 28, Tenet said. Powers, 53, most recently was a division president at Triad Hospitals, Plano, Texas, and was named a Modern Healthcare Up & Comer in 1994. The layoffs are a result of general patient-volume weakness in South Florida, Tenet officials said.
The Federal Trade Commission announced a consent order settling what it called a naked agreement to eliminate competition involving American Renal Associates and Fresenius Medical Care in Rhode Island and southeast Massachusetts. The FTCs complaint stemmed from a 2005 purchase agreement among the companies in which American Renal was to pay $1.6 million for Fresenius to close three clinics and another $2.8 million to take possession of the remaining five Fresenius clinics in Rhode Island. In the consent orderwhich does not constitute an admission of wrongdoing by American Renal or Freseniusthe companies would be prohibited from making agreements with other clinic operators that divvy up territory or customers. American Renal would be required to notify the FTC of any planned acquisitions in the area of Warwick, R.I., and Cranston, Mass. The commission will vote whether to make the order final after a 30-day window for public comment, which closes Oct. 9.
At deadline, Evanston (Ill.) Northwestern Healthcare had yet to tell the Federal Trade Commission how it would comply with an order to erect a firewall in its managed-care negotiations, intended to fix the harm caused by a merger the agency deemed anti-competitive. Tilden Katz, a public relations consultant working for Evanston Northwestern, said the three-hospital system was on track to respond on Sept. 10, which is the FTCs deadline. Katz declined to say whether Evanston Northwestern had decided whether to appeal the order. The system publicly celebrated the result last month because it reversed an administrative law judges 2005 decision that the proper solution was to unravel its 7-year-old union with Highland Park (Ill.) Hospital. The FTC issued a landmark opinion in August using an analysis of post-merger price increases to determine the merger ran afoul of federal antitrust law. Instead of divestiture, the FTC ordered the system to create two separate and fully independent bargaining teams, one for 172-bed Highland Park and the other for 125-bed Glenbrook Hospital in Glenview, Ill., and 380-bed Evanston Hospital.
Maine officials selected a new administrator for its DirigoChoice health plan, a state-subsidized insurance program offered to uninsured residents who are ineligible for Medicare or Medicaid coverage. Beginning Jan. 1, Harvard Pilgrim Health Carea not-for-profit company based in Wellesley, Mass.will take over management of DirigoChoice, which is currently administered by Anthem Blue Cross and Blue Shield. We needed to find someone who could deliver the program within our budget, so we turned to a non-profit carrier, said Trish Riley, director of the governors office of health policy and finance. The states two-year, $172 million budget for DirigoChoice is basically holding steady in terms of funding, added Riley. Maine officials began considering a switch in administrators earlier this year, but were forced to make a quick change when negotiations with Anthem for the 2008-09 coverage period broke down over the carriers request that the new contract include a $3 million to $4 million risk-sharing fund. The set-aside could be tapped to offset any losses Anthem might experience from increased claim costs, Riley said.
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