News in brief - July 10/17, 2000

Report pans direct contracting - Fine print in drug ads overlooked - Texas doctors get settlement - 1 million lost Medicaid in welfare exit - Journal editor blasts drug prices - Plans loosen restrictions - Calif. behind nation in health coverage - Cigna ends HMO in Louisiana

Report pans direct contracting

A report prepared for the California Public Employees Retirement System, the nation's second largest health care purchaser, said direct contracting with doctors and hospitals could cost up to $12 million a year and leave CalPERS open to liability litigation.

The report by Deloitte & Touche added that physicians and hospitals fear direct contracting would bring more financial pressures at a time when many are in the red.

Fine print in drug ads overlooked

One-third of more than 1,300 consumers failed to notice the small print in ads that describe side effects of prescription drugs, according to an AARP survey.

Texas doctors get settlement

In settling a suit by Texas physicians, PacifiCare and other health plans agreed to expedite payment of claims pending for more than 45 days and to pay other claims before they hit that point.

Texas law requires insurers to pay clean claims within 45 days.

1 million lost Medicaid in welfare exit

Nearly a million people lost Medicaid coverage when they moved from welfare to work, even though many were still eligible for Medicaid, according to a report by Families USA.

Journal editor blasts drug prices

In an editorial in the New England Journal of Medicine, outgoing editor Marcia Angell, MD, questioned the reasons the drug industry gives for high prices.

She said many new drugs "add little to the therapeutic armamentarium" and said the industry "benefits enormously from publicly funded research, government-granted patents, and large tax breaks, and it reaps lavish profits."

Plans loosen restrictions

Aetna U.S. Healthcare said that as of July 1 it would modify its requirement for physicians to participate in all its products in Virginia.

The decision follows passage of a state law banning such requirements. Maryland, Kentucky and Nevada also ban all-products clauses.

And in Minnesota, HealthPartners said it will remove some prior-approval rules for all but 50 of more than 9,500 medical procedures the plan reviews.

Calif. behind nation in health coverage

California has the highest percentage of people without health insurance (24%), even as its health plans are generally more comprehensive and cost less than in the rest of the country, said a study by the Kaiser Family Foundation.

One reason is that only 48% of California employers offer coverage compared with 61% nationally, the study added.

Cigna ends HMO in Louisiana

Cigna Healthcare said it will end its Louisiana HMO, which covered just 9,282 patients.

The company said it will continue its more popular PPO and point-of-service plans that cover 61,000 Louisiana residents.

HMO plans in Louisiana have had a hard financial time in recent years after taking on more and more members in a hotly competitive market, then experiencing the resulting growth in claims.