Healthcare News

Last Updated: 04/26/2008

A sampling of healthcare news is provided for your enjoyment.  Breaking news is shown on this page and the following link will take you to a Microsoft Word file containing a sampling of 2007 and prior healthcare news.

Archived News: 2007 and Prior

Breaking News

EMR: Allscripts merges with Misys - New Company named Allscripts

3/17/08: Chicago-based electronic medical records provider Allscripts announced it has agreed to merge with British rival Misys PLC in a cash-and-stocks deal worth more than $1 billion.  The new firm, which will operate under the name Allscripts, will become one of the largest players in the U.S.'s $20 billion electronic health-record industry. In its present form, Allscripts manages data for more than 40,000 American physicians. Once the firm merges with Misys, that figure will treble to 150,000 — or roughly one-third of all practicing doctors in the U.S.  Misys will hold a 54.5% stake in the new company.

Ohio: Docs win round with insurers at Statehouse - Will Kansas City Docs force their legislators to follow suit?

3/17/08:  Columbus Business Journal: Health insurers must tell physicians more about their reimbursement rates before negotiating contracts and must work faster to approve doctors' credentials under a bill headed to Gov. Ted Strickland. Many of the bill's provisions apply not just to doctors, but to hospitals, outpatient clinics and ambulance services. It requires a plain summary of contract terms and updated source of rate information. It also bans clauses that require a doctor to accept all an insurer's products or that keep them from accepting lower payment rates from another insurer.  The bill requires a standard form and sets a 90-day deadline for insurers to verify a doctor's medical education and license.  The Ohio Association of Health Plans, the insurers' group, opposes many of the provisions. CEO Kelly McGivern said the bill would allow more doctors to turn away Medicaid patients and would in some cases increase administrative burdens. "Business partners, not government, should decide on the terms and conditions of private contracts," she wrote.

Commentary: It's good to see the Ohio legislature step up and try to level the playing field for small business physicians and multi-billion dollar insurers. Health Plan CEO Ms. Kelly McGovern certainly doesn't understand the history of the Trusts and oligopoly power when she states that business partners and not government should decide on the terms of private contracts. One definition of "partnership" is: "A relationship between individuals or groups that is characterized by mutual cooperation and responsibility, as for the achievement of a specified goal." How does that apply to insurers and physicians? She needs to open a history book and learn why such action is necessary.

Employer Discrimination Charges increase in 2007

3/5/08: From Polsinelli Shalton Flanigan Suelthaus PC: The Equal Employment Opportunity Commission (EEOC) released its statistics for the number of discrimination charge filings in 2007. The EEOC's report showed the number of charges filed was the highest it had been since 2002 - specifically, a 9.3% increase over 2006. The EEOC noted that allegations of discrimination based on race, retaliation and sex continued to be the most frequent in 2007, as they have for over 10 years.  EEOC Chair Naomi Earp noted that employers need to "do a better job of proactively preventing discrimination and addressing complaints promptly and effectively."  Employers must clearly communicate their non-discrimination policies, keep an open door with a flexible reporting scheme, and follow through with their published policy to investigate complaints and discipline offenders.

Medical Record Copying Cost Update

February 2008: State law requires Kansas Secretary of Human Resources to annually update the amount health care providers may charge for records duplication. The amount is adjusted based on changes in the Consumer Price Index. Here are the fee increases, effective January 17, 2008. For the cost of supplies and labor, you may charge a fee not to exceed $17.50. For copies of health care records routinely duplicated on a standard photocopy machine, you may charge $0.58 per page for the first 250 pages, and $0.41 page thereafter. For copies of health care records not routinely duplicated on a standard photocopy machine, you may charge a reasonable fee. — Ruth Cornwall, Kansas Legislative Liaison

Insurance Companies' Q1 2008 Earnings

Aetna:  Operating earnings were $0.92 per share, a 14 percent increase over the prior-year quarter.  The increase in operating earnings per share reflects a 16 percent growth in total revenue, primarily from quarter-over-quarter membership growth and premium rate increases.  Full-year 2007 operating earnings were 20% higher than 2006. Full-year net income was 16% higher than 2006.   For 2006, they posted a 29% Increase over 2005.
 

Aflac: Total revenue rose 13.2%.  Net income was up 14%.
 

BCBS - Kansas City (880,000 members):  2007 annual report not yet posted.  2006 revenues up 10% from 2005.  Net income up 7.26%.  Surplus up nearly 12%.
 

BCBS - Kansas (688,000 members):  2007 annual report not yet posted. A Mutual Insurance Company (not a not-for-profit entity). Only provides weak annual reports online. For 2006, reserves increased 2.4%, claims incurred but not paid increased 17.5%. No revenue figures shown. For complete financials, call Steve Morris at (785) 291-7050. BCBS-KS subsidiary, Wheatlands Administrative Services, lost the Medicare contract for their region beginning mid-2008.
 

Cigna: Revenue up $1.1 billion or 6.7%. EPS up 25%. Adjusted Income from operations up 7.5%.
 

Coventry:  Revenues up 31.5% from the prior year quarter.  4Q07 - Revenues up 43.6% from the prior year quarter.  Earnings per share (EPS) up 21.6% from the prior year quarter.  For 2007 - Revenues up 27.7% from the prior year.  Diluted EPS up 14.7% from the prior year.  For 2006, they posted a 17% Increase in revenue over 2005.
 

Great West:  On November 26th the parent company announced that its USA healthcare business would be sold to CIGNA. Net Income up 24.2%. Parent company Revenues increased 1.7% and net income increased 9.5% for 2007.  For 2006, they posted a 9.5% Increase in revenue over 2005 and a decrease of 9.25% in net earnings.  The healthcare division posted a revenue increase of 5.4%.
 

Group Health Cooperative (Washington & Idaho: 570,000 members): No new 2007 information posted.  For 2006, total revenues increased 11.4% and net income increased 117% over 2005. The CEO stated, "We ended the year with a consolidated margin of 9.2 percent or $238 million — the best in our history. As a consumer-governed, nonprofit health care system, Group Health reinvests net earnings in our staff, systems, and facilities to serve our members, while honoring our mission to expand access to care."

Humana:  4Q07 consolidated revenues rose 12 percent.  FY07 consolidated revenues rose 18 percent.  For 2006, revenues rose nearly 50% and earnings per common share up 60% over 2005.
 

Principal:  The company reported Record annual operating revenues in all four operating segments, a 14 percent increase for 2007. "Earnings for the health division fell short of our expectations in the fourth quarter,  said Zimpleman. While we can't control equity and credit market conditions, we continue to intensify our turnaround efforts in the health business, focusing on network discounts, claims costs and expense management."
 

United Healthcare:  1Q08 - Revenues increased 7%.  Net Earnings increased 5%. Achieved record revenues and earnings in 2007.  Full Year Adjusted Earnings Per Share up 18%.  Full Year Return on Equity of 22%.  UnitedHealth Group has withdrawn reliance upon its historical financial statements because previously reported operating costs did not correctly reflect non-cash stock-based compensation expenses related to historic stock option grants.
 

WellPoint / Anthem (BCBS MO Parent): 1Q08 - Operating revenue increased 3.5 percent.  Net income down 24.9%.  Fourth quarter 2007 diluted earnings per share increased by 18.0%.  For full year 2007, operating revenues increased 7.1 percent over 2006. The revenue increases were driven by disciplined pricing in the Local Group business...   For 2006, they posted a 22% increase in net income over 2005.

2008 UPDATED CCHIT Approved EMR Products

4/26/08:  History: Three leading HIT industry associations – the American Health Information Management Association (AHIMA), the Healthcare Information and Management Systems Society (HIMSS) and The National Alliance for Health Information Technology (Alliance) – joined forces in July 2004 to launch the Certification Commission for Healthcare Information Technology (CCHIT) as a voluntary, private-sector organization to certify HIT products. The three committed resources to support CCHIT during its organizational phase. In September 2005, HHS awarded CCHIT a three-year contract to develop and evaluate certification criteria and create an inspection process for HIT in three areas: Ambulatory EHRs for the office-based physician or provider, Inpatient EHRs for hospitals and health systems, The Network components through which they interoperate and share information.

To see all products certified to-date go to http://www.cchit.org/choose/ambulatory/2007/index.asp.

Payor Fast Facts - UPDATED 12/30/07

For 2006, insurance companies stack up as follows, according to Payerview.com.

Among The Blues:

BCBS-KC: 3rd best denial rate at 5.8%

Midwest Overall Rankings out of 23 payors:

BCBS-KC: 3rd

Aetna: 4th

Coventry: 5th

Humana: 6th

United: 7th

Cigna: 8th

Great West: 14th

National Overall Rankings out of 8 payors:

1. Cigna

2. Aetna

3. Medicare - B

4. Humana

5. United

6. WellPoint

7. Coventry

8. Champus / Tricare

Miscellaneous Rankings:

Worst Denial Transparency: Coventry

Most Claims Requiring Medical Documentation: Champus / Tricare

Worst Noncompliance with CCI:  Coventry, followed by Aetna

Highest Denial Rate:  Champus, followed by United.

Top Three Slowest payors: Champus 39.9 days, United 38.3 days, Coventry 35.1 days

HIPAA Related News

July 2, 2007 Graphic

Note:  There have been 4 criminal convictions.  Amazing the NYT got something wrong...

Below are the four convictions registered to-date.

1 & 2. In the first HIPAA violation case to go to trial, a Fort Lauderdale jury convicted Fernando Ferrer, Jr. on Jan. 24, 2007 of computer fraud, conspiracy to defraud the United States, aggravated identity theft, and the wrongful disclosure of protected health information under HIPAA. The case involved the theft and transfer of Medicare patient information from the Cleveland Clinic in Weston, Fla. Ferrer purchased the patient information from a former Cleveland Clinic employee, Isis Machado, who pleaded guilty to similar charges and testified against Ferrer. The theft resulted in the submission of more than $7 million in fraudulent Medicare claims. In addition to a maximum sentence of 20 years for the non-HIPAA counts, Ferrer faces up to 10 additional years in prison for wrongfully disclosing protected health information.

3. On August 23, 2006, the second person to be prosecuted under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) was sentenced to six months imprisonment and four months home confinement followed by two year term of supervised release. Liz Arlene Ramirez had pled guilty to one count of wrongful disclosure of individually identifiable health information.  According to the press release issued by the United States Attorney’s Office for the Southern District of Texas, Ramirez was employed at a physician’s office under contract to provide physicals and medical treatment to FBI agents. She allegedly offered and agreed to provide medical information of an FBI agent patient to a person she believed was working for a drug trafficker in exchange for $500. That person was actually an FBI informant.

4. The first HIPAA criminal conviction occurred in 2004. U.S. v. Gibson involved a cancer center employee who stole patient data to fraudulently obtain credit cards. This employee could have easily been prosecuted under a state identity theft statute but instead, the U.S. Attorney’s Office chose to prosecute this individual under HIPAA. HIPAA attorneys speculate that the cancer center was not fined or prosecuted under HIPAA since they had reasonable and appropriate policies and safeguards in place and were not aware of the employee’s actions. Gibson just finished his 16 month sentence in a federal prison.

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For Your Enjoyment! From the "Government can do it better" department...or the..."Let's have national insurance with all our medical information residing on government computers" department 

1. August 15, 2007: According to the Treasury Inspector General for Tax Administration (TIGTA), US taxpayers' personal information is at risk because managers and employees within the Internal Revenue Service (IRS) are not complying with security policies and procedures. Despite the IRS losing at least 490 computers with sensitive data between 2003 and 2006, employees were still found not to be encrypting personally identifiable information on their laptops and disregarding email policy. In addition systems were found neither to have been hardened nor to have the default passwords changed. The report calls for IRS executives to hold managers and staff accountable for their actions. http://www.fcw.com/article103499-08-15-07-Web&printLayout

2. June 21, 2007(computerworld.com): Recent testimony centering on more than 800 IT security incidents at the Department of Homeland Security (DHS) has caused House Homeland Security Committee Chairman Rep. Bennie Thompson (D-Miss.) to question whether DHS CIO Scott Charbo should continue in his position. Thompson was vexed that it took external auditors to point out to DHS that their IT systems have serious security problems. Thompson said DHS should serve as an example to the rest of the government. Additionally, Thompson says that "a 'do as I say, not as I do' policy is a recipe for disaster, and if we are serious about the security risks facing our networks, then we need to start acting and stop posturing." GAO chief technologist Keith Rhodes tested DHS systems over the last year and said he "would label [DHS] as being at high risk."

3. September 15, 2006: A GAO report finds that the Department of Health and Human Services has information technology (IT) and Privacy Issues. Two reports issued earlier this month from the Government Accountability Office (GAO) criticize Department of Health and Human Services' (HHS) efforts regarding health IT and patient privacy. One of the GAO reports states HHS and the Centers for Medicare and Medicaid Services (CMS) systems and controls have significant weaknesses. The other GAO report finds more than 40% of federal contractors to the Medicare and Tricare programs and state Medicaid agencies had experienced privacy breaches. http://www.hipaadvisory.com/news/index.cfm#0915mh

Political Tidbit

To see who is controlling the actions of your elected representatives, click here:  www.opensecrets.org/politicians.

HIPAA Answer: b, c.