The House and Senate reached a compromise on legislation to reauthorize the State Childrens Health Insurance Program for another five years with an additional $35 billion, while rolling back a Bush administration directive that tightens enrollment requirements for states. As expected, the bill has neither payment cuts to Medicare Advantage plans, nor does it reverse an expected 10% physician fee cut slated for next year. A provision in the bill effectively quashes a directive that limits states from expanding coverage to children from higher-income families. Both the House and Senate are expected to vote on the bill this week. SCHIP expires on Sept. 30. President Bush has threatened to veto legislation that would expand the program.
One out of every three nonelderly Americans, or 89.6 million people, went without healthcare coverage at some point over the past two years, with the majority of those individuals coming from working families, a new report released by Families USA found. In comparison, in 1999 and 2000, 72.5 million individuals spent some amount of time uninsured, a difference of more than 17 million. The numbers take recently released Census Bureau data, which showed that 47 million Americans were uninsured, a step further. Sen. Hillary Rodham Clinton last week unveiled the final part of her platform to cover the uninsured (See story, p. 12).
Sun Health, a two-hospital system, signed a letter of intent to merge with Banner Health, the not-for-profit, Phoenix-area systems said. The announcement follows recent deals that some say may spur interest from federal antitrust enforcers (See story, p. 8). In Phoenix, the asset merger will add about $600 million to Banner Healths $3.3 billion in annual revenue, said Peter Fine, president and chief executive officer of Banner. Sun Health, based in suburban Sun City, has 601 beds on two campuses. Banner Health has 2,145 staffed beds at six general acute-care hospitals in Arizona. Fine said he did not expect any consolidation of services or employee downsizing. Sun Health Foundation and Sun Health Properties will remain independent. Suns two hospitals will carry the Banner Health brand. Sun Health approached Banner Health with the merger idea, said Sun Health President and CEO Leland Peterson. The merger is expected to close in six to nine months.
A civil lawsuit filed by a former Novation senior products manager, Cynthia Fitzgerald, was reopened, charging the group purchasing organization with accepting kickbacks from vendors, according to the complaint. The lawsuit, filed in U.S. District Court in Dallas, alleges Novation fired Fitzgerald after she refused to do business with companies that offered to give the GPO upfront payments in order to win supplier contracts. Novations parent, VHA, and affiliates University HealthSystem Consortium and HealthCare Purchasing Partners International (now known as Provista) are named as co-defendants in the case. Also named are suppliers Johnson & Johnson, Becton Dickinson & Co., Heritage Bag Co., Global Health Exchange, Cardinal Health, Allegiance Corp. and Owens & Minor. Neither federal nor Texas state prosecutors have agreed to join the case, but Jerry Strickland, a spokesman for the Texas attorney generals office, said the office still might. Jody Hatcher, a senior vice president for Novation, said the GPO plans to vigorously fight the lawsuit. According to court documents, defendants could potentially face penalties of up to three times the amount of any overpayments charged to Medicare and Medicaid plus $11,000 for each false reimbursement claim filed with federal payers and $10,000 for each false claim filed with the state of Texas. Fitzgerald is also seeking damages.
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