News in brief - Dec. 18, 2000

Insurance groups plan merger to create heftier lobby

Two large health insurance associations are negotiating a merger that could produce a mega-group that packs a lot of clout when lobbying on such issues as patients' rights.

The American Assn. of Health Plans and the Health Insurance Assn. of America were expected to announce their merger shortly after AMNews press time.

AAHP represents many of the large HMOs and other managed care companies, while HIAA claims more traditional indemnity plans among its members. But both groups generally have lobbied on the same side of issues, and some of their membership overlaps. For example, both oppose the expanded managed care liability provision in patients' rights legislation passed by the House. The AMA is strongly in favor of the House bill.

It has been reported that Karen Ignagni, now president and CEO of AAHP, will head the new organization. Charles Kahn, HIAA's president, is expected to leave the group. He has been mentioned as a possible head of the Health Care Financing Administration in a Bush administration.

A General Accounting Office investigation shows that HCFA twice extended a contract with an accounting firm to conduct Medicare audit quality reviews despite knowing that the company had been implicated in a Medicare fraud scheme.

The firm, KPMG, advised its client, Columbia/HCA, on preparation of Medicare cost reports whose submission led to fraud charges against the hospital company. Columbia agreed to pay about $750 million in a partial settlement of civil fraud claims, and two of its executives were convicted of conspiracy and criminal fraud last year. Qui tam proceedings against KPMG are continuing, the GAO said.

The HCFA official who handled the contract extensions was aware of the allegations but accepted KPMG's assurances that the unit under contract had not been involved in the alleged fraud, the report states.

Michael Hash, HCFA acting administrator, was set to leave the agency Dec. 15. He took the helm when Nancy-Ann DeParle left earlier this year. Robert Berenson, MD, will replace Hash in the time remaining in the Clinton administration.

Hash, a former staffer for Rep. Henry Waxman (D, Calif.), had served as deputy administrator of HCFA for three years. He called his tenure at HCFA "the most rewarding professional experience in [his] career."

"I am proud of our accomplishments, such as the nursing home initiative, where we have been able to improve the quality of care that Medicare and Medicaid beneficiaries receive in nursing homes," Hash told fellow HCFA employees. Hash also called HCFA's strengthened management of Medicare contractors a large accomplishment.