News in brief - Oct. 1, 2001

Texas HMOs merge into one big Blue - Study: Most billing errors come from health plans - Consumer survey: Patient HMO, PPO satisfaction equal - Harvard Pilgrim selling health centers - California seizes doctor-owned HMO

Texas HMOs merge into one big Blue

Blue Cross and Blue Shield of Texas, a division of Chicago-based Health Care Services Corp., has knitted its eight health maintenance organizations into a single health plan called HMO Blue Texas in an effort to reduce costs due to recent financial losses.

The plan will have 703,000 members throughout the state and will combine all eight HMO physician and hospital networks.

Company officials said the merger would not affect any member benefits, payments or enrollment status.

Darren Rogers, Texas Blues vice president and COO, said, "We really needed to merge the companies to simplify life internally for us, as well as for the agencies we deal with and our members and providers."

Blue Cross added three HMO networks to its holdings last year, running each as an individual business alongside its five original HMOs, which also had been run as separate entities.

Study: Most billing errors come from health plans

Health plans are the cause of 54% of billing and access to care problems and errors, according to a study by the management consulting firm Hewitt Associates. Seventeen percent of billing or coverage issues result from physician or allied health care error, and 29% result from patient error.

Consumer survey: Patient HMO, PPO satisfaction equal

Health patients are equally satisfied with the care received from PPOs and HMOs, according to a reader survey by Consumer Reports magazine. About 57% of PPO users and 55% of HMO users reported being highly satisfied with their plan. Those patients with serious health problems, however, reported being happier with the service received in PPO plans.

Of the 44 largest HMOs in the country, the survey gave the best rating in member satisfaction to Capital District Physicians' Health Plan of New York -- with 78% of its members reporting they were highly satisfied and 2% reporting having trouble getting care. Of the 11 largest PPOs, the survey ranked CareFirst BlueCross and BlueShield of Maryland highest and Prudential Healthcare the lowest. The results appear in the magazine's October issue.

Harvard Pilgrim selling health centers

Harvard Pilgrim Health Care, an HMO that emerged from Massachusetts state receivership last year, plans to raise money by selling two of its health centers and leasing them back, plan officials said.

The HMO, still under state supervision, is looking to revive a bond deal it put on the shelf two years ago due to a $227 million operating loss in 1999. The deal would have the Massachusetts Health and Educational Facilities Authority buy the buildings and rent them back to Harvard Pilgrim.

California seizes doctor-owned HMO

California health officials took control of Tower Health Sept. 14, changing the locks and freezing the bank accounts of the physician-owned HMO. The state said Tower Health's financial situation posed an imminent threat to its 111,000 patients.

Tower Health had $600,000 in cash at the end of July and more than $13 million in liabilities, according to the state's Dept. of Managed Health Care.