News in brief - July 23, 2001

PacifiCare drops Heritage contract in Texas

PacifiCare Health Systems Inc. cancelled its contract with Heritage Southwest Medical Group, an 800-physician IPA in Dallas.

PacifiCare was the only managed care plan that the IPA still had a contract with. Last January, BlueCross BlueShield of Texas, two medical groups and three physicians filed a lawsuit against Heritage in an effort to force the IPA into Chapter 7 bankruptcy and obtain payment for unpaid claims. In April, a court ordered the parties into arbitration. PacifiCare made its move in June.

A lawsuit has been filed to keep New York HMO Independent Health from dropping infertility coverage as part of its base insurance. Independent Health had said it would begin cutting the benefit this month.

The state of Indiana has sued Maxicare Health Plans, charging the financially insolvent Los Angeles-based HMO operator with fraudulent concealment and breach of contract.

Maxicare last year stopped paying on a reinsurance policy that would have paid for coverage if the company ever became insolvent, according to state regulators.

Lack of such a policy may mean Maxicare doesn't have the resources to pay for health coverage of its 99,000 members during the receivership period, say state insurance regulators who took over Maxicare's Indiana operations in May.

Kaiser Permanente has decided to allow its doctors to endorse medical marijuana for patients.

"It is our preliminary decision that physicians should be afforded the responsibility as to whether to endorse medical marijuana," Kim Adcock, MD, assistant medical director for Kaiser in Colorado, said in a July 5 Denver Post article.

The decision, said Dr. Adcock, is a preliminary one and won't become company policy until the person within the Kaiser administration who has the authority to make it official returns from vacation.

The state's medical marijuana program was approved by voters in November and was effective June 1. State Attorney General Ken Salazar has decided that a U.S. Supreme Court decision outlawing cannabis buyers' clubs for California patients didn't invalidate Colorado's law.

The largest overhaul of TennCare since its inception, including new health care options for the state's poor and uninsured, went into effect July 1. The state health insurance plan, with 1.3 million enrollees, has added two new managed care organizations to the system.

The state added plans and put a cap of 300,000 enrollees per plan to spread risk and not make TennCare too dependent on one plan.

The state also is increasing payments to health plans by an average of 4.1% and is requiring those covered by TennCare who are not poor enough to be on Medicaid to pay more in premiums.

BlueCross BlueShield of North Carolina's acquisition of Partners National Health Plan will cost $202 million, according to an acquisition statement filed by the insurer.

The amount represents about a third of the insurer's reserves. The deal would combine the state's largest nonprofit health insurer with the state's largest for-profit HMO.