Regional News/West: Garfield Medical Center settles lawsuit, and other news

PHOENIX—Banner Health and insurer Aetna, Hartford, Conn., will begin in January to enroll small employers into a health plan for a newly created accountable care organization.

The health plan will offer Banner Health financial incentives to manage costs and reach quality and patient satisfaction targets, said Dr. Charles Kennedy, CEO for Aetna's accountable-care solutions. Members will have incentives to use Banner Health and affiliated physicians in the health plan's limited network. However, members may seek care outside of Banner Health, Kennedy said. Some quality measures included in Aetna's accountable-care contract with Banner overlap with those proposed for the Medicare shared savings program, he said. The Medicare shared-savings program, which will launch April 1, uses financial incentives to promote cost-control and quality performance. Aetna seeks to align its quality goals as much as possible with Medicare, he said. The insurance company also has accountable-care agreements with the Carilion Clinic and Heartland Health.

ALHAMBRA, Calif.— A new division of seven-hospital AHMC Healthcare acquired Central Health Plan of California from a privately held investor group in Diamond Bar, Calif., according to a news release. Financial terms of the deal were not disclosed. The buyer, AHMC Central Health, is a newly formed California company under the health system. Central Health has operated since 2004 and offers services to about 11,000 Medicare Advantage beneficiaries in Los Angeles, Orange and San Bernardino counties, according to the release. Officials at AHMC said they will run Central Health with as few changes as possible, including continued operations as a Knox-Keene licensed HMO. AHMC Healthcare President Dr. Jonathan Wu said in the release that the system and its hospitals are “excited about the opportunity to work with Central Health Plan's contracted physicians and employees in an integrated fashion so that we can provide better and more efficient care to our patients.”

MONTEREY PARK, Calif.—Garfield Medical Center will pay $530,000 to settle a lawsuit filed by the U.S. Equal Employment Opportunity Commission alleging the hospital created an atmosphere that enabled a male emergency room employee to sexually harass at least 10 female employees. Garfield administrators terminated an employee who reported the harassment, and the hospital further retaliated by allowing the hostile work environment to drive other employees to resign, according to the EEOC lawsuit filed in August 2010 in U.S. District Court in Los Angeles. The EEOC alleged the harassment included groping, graphic descriptions of sexual acts, propositions for sex, obscene pictures and lewd comments about female body parts, including comments about an underage female patient. The incidents started in 2007, and the harasser went through counseling and was terminated in 2009, two years after other workers notified the hospital of the allegations, the EEOC said. The settlement includes setting $100,000 aside as a class fund for victims who haven't come forward. Garfield also must maintain a toll-free complaint hotline, hire a consultant to track complaints, and provide anti-harassment and anti-retaliation training for staff. Officials at 210-bed Garfield said in a statement that they “disagree with the EEOC's characterization of events,” and entered the agreement to “avoid expensive and protracted litigation and are pleased to have this matter concluded.”

SACRAMENTO, Calif.—Sutter Health reported that a desktop computer with personal information for 4.24 million patients was stolen in October. The computer stored names, addresses, dates of birth, phone numbers, e-mail addresses, medical-record numbers and insurance plan names for about 3.3 million patients of 22 Northern California providers contracted with Sutter Physician Services, which handles business and administrative services. The data for those patients spanned from 1995 to January 2011. The computer also held similar data for another 943,000 patients who sought care from the Sutter Medical Foundation from January 2005 to January 2011. Those records also included dates of services and descriptions of medical diagnoses and procedures used for business operations. Sutter said it will notify Sutter Medical Foundation patients by Dec. 5. A Sutter Health spokeswoman said the system is not planning to notify the 3.3 million patients directly. “Sutter Health holds the confidentiality and trust of our patients in the highest regard, and we deeply regret that this incident has occurred,” Sutter Health President and CEO Pat Fry said in the release. The computer was stolen during the weekend of Oct. 15-16 from Sutter Medical Foundation's administrative offices in Sacramento, the system said. The data was password-protected but unencrypted, Sutter said, noting that its data security office was in the process of encrypting desktop computers.