News in brief - April 12, 2004

Online consultations slow to take off - Blues approve Anthem-WellPoint deal - R.I. AG blasts plan giveback - N.C. Blues could face reserve limit - Florida Blues looks into overbilling - HealthSouth delays report

Online consultations slow to take off

A majority of adult Internet users are interested in engaging in online consultations with their physicians, but only 3% of them did in 2003, according to a national survey by JupiterResearch. A key reason is that 92% of consumers are unwilling to pay more than $10 for an online consultation, said the Darien, Conn.-based marketing research firm. JupiterResearch predicted that usage won't rise much above current levels unless insurers pay for the service.

Blues approve Anthem-WellPoint deal

The proposed merger between Anthem Inc. and WellPoint Health Networks was approved unanimously by the Blue Cross and Blue Shield Assn. in March.

The $16.4 billion merger is structured as a buyout of California-based WellPoint by Indiana-based Anthem. It will create the nation's largest for-profit health plan, with about 26 million members in 13 states. The deal still requires the approval of state regulatory agencies and the shareholders of each company. Federal regulators recently announced that they would not stand in the way of the merger.

R.I. AG blasts plan giveback

The attorney general of Rhode Island is criticizing a $21 million giveback by Blue Cross & Blue Shield of Rhode Island to doctors, plan members and hospitals, saying all of the money should be refunded to patients.

Attorney General Patrick C. Lynch said giving part of the surplus money back to doctors and hospitals is an improper attempt to "mollify" them because they're unhappy with insufficient insurance reimbursement rates, according to the Providence Journal.

The attorney general has no power over the funds, however, and much of the rebate money already has been paid out, the newspaper reported.

The insurer had a $70 million profit in 2003, and of the $21 million that it opted to disburse as a giveback, $7 million is going to physicians as reimbursement increases, $7 million is going to hospitals and $7 million is going to individual policyholders and employers who are plan sponsors.

N.C. Blues could face reserve limit

Insurance regulators in North Carolina are preparing to draw up proposed legislation that would limit the amount of reserves that Blue Cross and Blue Shield of North Carolina could set aside.

The state Dept. of Insurance has formed a working group of insurance experts who will look at the record level of surplus funds that the Blues plan has amassed, decide whether it's excessive, and come up with legislation that would set a cap on future surplus levels and set up guidelines on when money would have to be rebated to plan members, said department spokeswoman Chrissy Pearson. The legislation would be ready for sponsorship by state legislators when they convene in May.

The Blues plan had profits of about $196 million last year and by the end of the year had put away more than $743 million in reserve funds.

Blue Cross's CEO, Robert J. Greczyn, has said the plan might consider rebating some reserve money to patients if the plan continues to achieve high profits in 2004.

Florida Blues looks into overbilling

Blue Cross and Blue Shield of Florida is working to determine which patients it owes money to after a glitch in the company's billing system caused thousands of its members to be overbilled.

The Jacksonville-based insurance company incorrectly billed 3,600 PPO members, the vast majority of whom were enrolled in a state employee medical plan and who received services at the Mayo Clinic, said Barry Schwartz, MD, vice president of care and network management at Blue Cross.

Blue Cross sent the incorrect bills to Mayo, which in turn sent inflated bills to patients based on data it had received from the Blues, Schwartz said. He said he didn't know why the glitch occurred, but that it was a rarity considering the volume of claims the insurer processes. Mayo is refunding the overpayments as it verifies the new data it gets from Blue Cross.

HealthSouth delays report

HealthSouth Corp., the outpatient services giant at the center of an accounting scandal, says it is likely that it won't be able to file its latest annual financial report until the first quarter of 2005.

The embattled Birmingham, Ala.-based firm notified the Securities and Exchange Commission on March 15 that it would miss the deadline for filing the 2003 report and likely wouldn't submit its report before next year.

HealthSouth is under investigation by the SEC and the U.S. Dept. of Justice for allegedly overstating earnings by $2.7 billion or more over several years in a scheme to meet Wall Street expectations. Seventeen former employees have agreed to plead guilty to various criminal charges, and ousted chief executive Richard M. Scrushy is awaiting trial for fraud.