News in brief - April 23/30, 2001

Another PPM in bankruptcy - Trigon selling off subsidiary - Profiling case goes to court - Kaiser's credit rating improves - TennCare sends members "ballots" - Empire offers billion to be for-profit

Another PPM in bankruptcy

ProMedCo Management Co., a Fort Worth, Texas, physician practice management company, has filed for Chapter 11 bankruptcy protection. The company said it also would sell its Champaign, Ill., subsidiary to an unnamed group.

Trigon selling off subsidiary

Trigon Healthcare Inc., of Richmond, Va., is selling its subsidiary that handles the administration of employee benefits and workers' compensation, in a move to concentrate on its core health business. The operation, Trigon Administrators Inc., is a small part of the health insurance and managed care company's overall business.

A lawsuit by Akron, Ohio, internist Marwan Adjan, MD, alleging improper use of physician profiling by SummaCare Health Plan, an Akron insurer, recently began its trial in Summit County Common Pleas Court.

Dr. Adjan, removed from the health plan's network because he would not agree to improve his utilization scores, told the court: "When somebody offers you money to cut down on the service offered to patients or to ration care, I didn't think that was appropriate." Summa dropped Dr. Adjan in May 1999 after he refused to sign its "improvement plan" (AMNews, Dec. 18, 2000).

Kaiser's credit rating improves

California's largest HMO, Kaiser Permanente, reports its credit rating improved after reporting its first profit in four years -- a net income of $584 million on revenues of $17.7 billion for 2000. Standard & Poor's announced a stable outlook on Kaiser's A-rated bonds, and Moody's Investors Service boosted Kaiser's A3-rated bonds to "stable."

TennCare sends members "ballots"

TennCare, Tennessee's Medicaid managed care program, recently mailed "ballots" to more than 900,000 households statewide, giving enrollees a chance to choose new health plans for the first time in more than two years.

On July 1, plans serving TennCare will expand from eight to 10. However, three veteran plans -- BlueCross BlueShield of Tennessee's BlueCare, Access MedPLUS and Xantus Health Plan of Tennessee Inc. -- will reduce their geographic territory.

Empire offers billion to be for-profit

In its bid to become a for-profit insurer, Empire Blue Cross and Blue Shield of New York will establish a $1 billion charitable foundation for either health coverage for 100,000 uninsured children or prescription drugs for 50,000 low-income seniors. That amount, based on an upgrade of Empire's value by Credit Suisse First Boston, was more than double what the insurer previously estimated.