Late News

A House bill introduced by Reps. Lois Capps (D-Calif.) and Devin Nunes

(R-Calif.) would place a one-year moratorium on Medicare’s Recovery Audit Contractor program. The legislation would specifically require the CMS and the Government Accountability Office to evaluate the program during the moratorium and report to Congress on their findings. Recovery audit contractors review Medicare claims to identify improper payments to hospitals. The program began as a demonstration project made permanent by the Tax Relief and Health Care Act of 2006 and operates in five states. Contractors get to keep a percentage of the improper payments they collect from providers. The CMS scaled back a plan to expand the program to all 50 states by March 2008. In a revision issued Nov. 7, the agency said it would expand to only 15 new states by March, said Don May, vice president for policy at the American Hospital Association.

Physician-executive compensation rose 7.5% between 2005 and 2007, with average annual compensation now at $258,000, according to a survey to be released this week. In the past decade, physician-executive compensation has jumped 36.6%. “Demand for physician leadership is at an all-time high, as technological advances, industry focus on quality and economic pressures create an increasingly complex healthcare landscape,” said Carol Westfall, president of Cejka Search, which conducted the survey with the American College of Physician Executives, in a written statement. Out of the more than 2,000 members of the ACPE who completed the survey, including chief medical officers, medical directors and division chairs, 52% received bonuses. Nine out of 10 of those who received bonuses said the bonuses were up to 30% of total compensation. Compensation in rural areas was 5% below suburban and urban areas, but grew at twice the rate—12.5%—of those areas over the past two years. Physician-executives in corporate offices had the highest annual compensation ($325,000) while those working for the government had the lowest ($180,000).

A congressional committee is expressing concerns about the pending $2.6 billion merger between UnitedHealth Group and Sierra Health Services in a letter to the U.S. Justice Department. Rep. Nydia Velazquez (D-N.Y.), chairwoman of the House Committee on Small Business, wrote in the letter that “the level of concentration posed by this merger is tremendous.” She added that if steps are not taken to ensure continued competition in Nevada “a dangerous precedent will be set for evaluating future health insurance mergers across the nation.” Sierra Health, based in Las Vegas, is Nevada’s largest health insurance company. Officials at both UnitedHealth and Sierra Health have sought to reassure regulatory officials and the public that competition will continue. Insurance commissioners in Nevada, California and Arizona have already approved the merger.

Long-term-care provider Regency Hospital Co., Alpharetta, Ga., named William Anderson president and chief executive officer. Anderson, 58, had served as division president of Triad Hospitals, Plano, Texas, since 2001. Community Health Systems completed its $6.97 billion acquisition of Triad this summer. Other Triad executives also have landed on their feet since the buyout (Oct. 22, p. 6). Anderson succeeds founder Rod Laughlin, who remains as chairman.

The CMS said it will delay for one year the so-called “stand-in-the-shoes” provision in the final rule implementing Stark law prohibitions against physician self-referral, but only as applied to academic medical centers and not-for-profit integrated health systems. The rest of the rule, known as Stark III, goes into effect Dec. 4. The change would have significantly tightened an exception that has been granted to indirect financial relationships between physicians and hospitals to which they refer patients for certain services reimbursed by Medicare. The physicians, under the new rule, would be considered to stand in the shoes of their practice. The reprieve was prompted by comments arguing it would be impossible to structure support payments that are routine in faculty practice plans and not-for-profit systems so that they meet the requirements of other Stark exceptions, according to the rule to be published in the Federal Register Nov. 15.

California’s insurance commissioner is investigating a report that Health Net rewarded an analyst more than $20,000 in bonuses tied to canceling individual health insurance policies, thereby saving the company millions in medical expenses. “We certainly view this as a serious breach,” said Byron Tucker, spokesman for state Insurance Commissioner Steve Poizner. The Los Angeles Times reported that Health Net revoked 1,600 policies between 2000 and 2005, saving the Woodland Hills, Calif.-based insurer $35.5 million in medical payments. The company set policy rescission targets, which the senior analyst in charge of cancellations regularly exceeded, earning her praise and monetary rewards, according to the newspaper. “The characterization of our compensation programs is inaccurate and misleading,” Health Net said in a written statement. The bonuses were disclosed during an arbitration hearing on a $6 million lawsuit.

What do you think?

Write us with your comments. Via e-mail, it’s [email protected]; by fax, 312-280-3183.