News in brief - Oct. 2, 2000

Aetna will cover peds drugs in Calif. - Doctors won't join new TennCare plans - Calif. Medicare HMOs seek rate hikes - Texas sues drugmakers, claims overpayments for respiratory meds - North Carolina fines Aetna $21,400 - Ariz. HMOs in red, want increases - N.C. practice files for bankruptcy - Employees move to HMOs - Many don't know they're in an HMO

Aetna will cover peds drugs in Calif.

Aetna U.S. Healthcare has agreed to reimburse California physicians for new pediatric vaccines.

The extra reimbursement was necessary because Aetna hadn't figured the new vaccines into contracts setting capitated rates.

Aetna says it will cover the cost of the vaccines and reimburse doctors an administration fee for each child until doctors sign new contracts including costs for the new drugs.

Doctors won't join new TennCare plans

More than 40% of doctors recently surveyed by the Tennessee Medical Assn. said they would not sign contracts with new HMOs that will take the place of those HMOs that have fled the troubled program.

BlueCross BlueShield of Tennessee announced last December that it plans to pull out of TennCare. The state, meanwhile, is negotiating with four new companies to join TennCare.

Calif. Medicare HMOs seek rate hikes

Blue Shield of California wants to impose a new $5 co-payment for each office visit. And PacifiCare of California wants to double monthly payments by its Medicare beneficiaries to $40 to $100, depending on the geographic area.

In addition, PacifiCare wants to replace its $2,000 yearly limit on brand name drugs to a $2,000 yearly limit on all drugs. The changes require federal approval.

Texas sues drugmakers, claims overpayments for respiratory meds

In a lawsuit, Texas Attorney General John Cornyn alleges the state made more than $20 million in overpayments for respiratory drugs to the following pharamaceutical companies: Napa, Calif.-based Dey Inc.; Columbus, Ohio-based Roxane Laboratories Inc.; and Reno, Nev.-based Warrick Pharmaceuticals Corp., a unit of Schering-Plough Corp.

The state seeks to recover the overpayments plus an additional $58 million in penalties.

North Carolina fines Aetna $21,400

Aetna U.S. Healthcare has agreed to pay $21,400 and submit a corrective action plan to settle allegations of insurance violations in North Carolina. The company was charged with failure to monitor access to providers, process utilization-review requests on time and send notices for claims denials.

Ariz. HMOs in red, want increases

United HealthCare of Arizona lost $17 million and Intergroup of Arizona Inc. lost $10.3 million in the first six months of 2000. As a result, the plans are demanding premium increases of as much as 50%.

N.C. practice files for bankruptcy

A remnant of Kaiser Permanente's North Carolina HMO business, 30-doctor Carolina Premier Medical Group in Raleigh-Durham, has filed for bankruptcy protection.

The practice has $13.6 million in liabilities and $6.6 million in assets, according to its bankruptcy filing.

Employees move to HMOs

A report in the September/October issue of Health Affairs says that 62% of the decline in indemnity enrollment is due to employee choice, while only 38% is due to employers no longer offering indemnity coverage.

"Employees are not being forced into managed care," wrote study co-author Jon R. Gabel, vice president of health system studies at the Health Research and Educational Trust in Washington, D.C.

Many don't know they're in an HMO

In a poll by the Center for Studying Health System Change, 13% of people enrolled in an HMO thought they were enrolled in another type of plan, while 11% of those in other types of plans said that they had an HMO.

"Policymakers should exercise caution in drawing conclusions about differences between HMOs and other kinds of plans," warned co-author Lee Hargraves at the Center.