News in brief - April 19, 2004

Tenet leaders buy stock - N.Y.: Health plans short on info - Primary care informatics group forms - MedQuist investigates billing practices - U.S. Oncology bought out

Tenet leaders buy stock

The top leaders at Tenet Healthcare Corp. are putting their money where their mouths are.

Trevor Fetter, chief executive officer and president, bought 10,000 shares of common stock in Tenet for $10.85 apiece on March 19. The transaction put his stake in Tenet at 110,000 shares of directly owned common stock. At AMNews press time, those shares were worth about $1.2 million.

His colleagues, Chief Financial Officer Stephen Farber and board Chair Edward Kangas, followed suit. Farber bought 10,000 shares of common stock in Tenet on March 22 for $10.60 per share and Kangas added 5,000 shares to his portfolio for $10.39 apiece on March 29.

Fetter and other leaders have been touting turnaround efforts aimed at helping the company dig out of its legal and financial woes, which include government investigations of its billing practices, lawsuits from former patients and shareholders and a $1.5 billion loss last year.

Company spokesman Steven Campanini said the stock purchases signal that the leaders believe their plan is working. "The purchase of stock by Mr. Kangas, Mr. Fetter and Mr. Farber obviously reflects they have confidence in the company's turnaround," he said.

N.Y.: Health plans short on info

Most health plans in New York, including Aetna and CIGNA, are doing a poor job of supplying patients with information to help them obtain treatment, as mandated by a state law, says a report from New York State Attorney General Eliot Spitzer.

Spitzer's employees posed as prospective enrollees of 22 health plans, sending the companies letters requesting information on the standards used to decide if various medical conditions were covered by insurance. This information is required to be given to patients under the state's Managed Care Consumer Bill of Rights.

The staff graded the replies received from the insurers, from A to F, and 11 plans received an F. Seven received a D. The only plan that got a B was Empire HealthChoice. None earned an A.

Plans with failing marks included Aetna, CIGNA, and Health Net.

Under the terms of court settlements with U.S. District Court Judge Federico Moreno in Miami, Aetna and CIGNA are required to disclose fee schedule and claim coding information to doctors.

Primary care informatics group forms

Several medical societies representing primary care doctors have formed the National Alliance for Primary Care Informatics to promote physician adoption of electronic medical records.

The groups formed NAPCI to ensure that they speak with one voice, and that the interests of primary care physicians are considered and addressed in the development of a national health information infrastructure, they said. The alliance was founded by the American Academy of Pediatrics, American College of Physicians, American Medical Informatics Assn., North American Primary Care Research Group, Society of General Internal Medicine, Society of Teachers of Family Medicine, American Nurses Assn. and National Organization of Nurse Practitioner Faculties.

MedQuist investigates billing practices

Philips Electronics has announced that its subsidiary MedQuist Inc. is reviewing its billing practices, forcing MedQuist to delay filing its 2003 annual report with the Securities and Exchange Commission.

Marlton, N.J.-based MedQuist said it had launched its review "in response to assertions made by a company employee of potential improper billing practices." The company, which is majority-owned by Philips, sells medical dictation products and transcription services.

U.S. Oncology bought out

U.S. Oncology Inc., the Houston-based company that manages cancer centers and oncology practices across the country, was acquired last month by Oiler Acquisition Corp., an affiliate of the private equity firm Welsh, Carson, Anderson & Stowe.

The transaction is valued at about $1.7 billion, including a payout to common stock shareholders of $15.05 per share.

The acquiring company held 14.5% of U.S. Oncology's stock. Through the transaction, which is expected to be completed in the second quarter, the equity firm will assume control of the U.S. Oncology network, including practices comprising more than 875 physicians in 32 states.

R. Dale Ross, chair and CEO of U.S. Oncology, will keep his job when the sale is completed.