News in brief - Aug. 21, 2000

Physician investor bails out Fla. plan - UCLA Medical Center income drops - HMO premiums to rise again - N.Y. fines plan for late payments - HMO doctors more dissatisfied - Cigna to provide formulary online - Two HMOs starting low-cost plans - N.J. to launch mental health survey

Physician investor bails out Fla. plan

Facing a $4.8 million shortfall and possible action by the state to declare it insolvent, the HIP Health Plan of Florida has signed a letter of intent to sell control of its 221,000-member plan to a consortium of health care companies headed by Steven Scott, MD.

Dr. Scott has a history of acquiring troubled HMOs. Under Florida law, HIP needs a $6.3 million cash surplus to operate, but its reserves sunk to $1.5 million in July.

UCLA Medical Center income drops

Once known for its profitability among academic medical centers, UCLA Medical Center's net income has fallen from $50 million to near zero in the past two years.

Administrators cite lower reimbursements from managed care plans as one reason for the drop.

HMO premiums to rise again

Hewitt Associates forecasts HMO premium increases of 12% for 2001 and William Mercer predicts a 13% to 15% rise.

Aetna is leading the way among major plans, with increases of about 12% to 14% for contracts renewed in the fourth quarter and next year. In California, Kaiser Permanente said its rates will rise 8% to 10% next year. Kaiser wants 10% to 15% increases in Maryland. Ohio HMOs plan to raise rates by 10% to 40% next year after raising rates 10% to 20% for this year. The Ohio plans lost $46 million last year and said hospitals have been negotiating higher reimbursement rates.

N.Y. fines plan for late payments

New York state insurance regulators have fined HealthNow New York $500,000 for violations of state prompt-payment laws.

The state said HealthNow underpaid claims for physician outpatient psychiatric services.

The company operates as Blue Cross Blue Shield of New York in Western New York and Blue Shield of Northeastern New York.

HMO doctors more dissatisfied

Primary care physicians in closed-panel HMOs are two to four times more likely than other doctors to be thinking of leaving their jobs, according to the July Journal of General Internal Medicine.

HMO doctors said they had less paperwork and more autonomy but also had less time, fewer resources and more problems with other staff.

Cigna to provide formulary online

Cigna HealthCare said it will make its drug formulary available online through an agreement with ePocrates, a San Carlos, Calif.-based company that distributes handheld devices for physicians.

The information will be available to physicians in ePocrates' pharmacy benefit management program and its device programs, the companies said.

Two HMOs starting low-cost plans

WellPoint Health Networks introduced a new product this month that reduces premiums by offering fewer covered benefits. Oxford plans to offer a similar product by October.

The companies are targeting small businesses that are thinking of curtailing coverage in the face of double-digit premium increases.

N.J. to launch mental health survey

In December, New Jersey officials will launch the first mental health consumer satisfaction survey. It will ask members of the state's 10 largest HMOs to evaluate treatment effectiveness, ease of access and HMO staff helpfulness.