News in brief - July 5, 2004

Delegates define hospital day - Tenet raises $1 billion - Ex-lender gets jail time - MedQuist delisted from NASDAQ

Delegates define hospital day

The House of Delegates voted during the AMA's Annual Meeting in Chicago in June to adopt a resolution defining a hospital day as the 24-hour period beginning when a patient is admitted. The definition is different than what is used by the Centers for Medicare & Medicaid Services, which defines a hospital day based on the calendar date.

Critics of the resolution said the definition could create reimbursement problems for physicians who perform separate services rendered on different days but within a 24-hour period.

But supporters said under the calendar system, patients who are admitted late in the day are being denied the full amount of some services that are allotted based on hospital days.

The AMA had previously adopted a policy encouraging hospitals and hospital medical staffs, CMS, private payers and other concerned groups to define a hospital day as the 24-hour period started at admission.

Tenet raises $1 billion

Tenet Healthcare Corp., the troubled hospital giant, says it has increased its financial flexibility by raising $1 billion in new debt from lenders and reducing other debt that matures in 2006 and 2007.

Also on June 15, the Santa Barbara, Calif.-based company announced it had repurchased $450 million in outstanding debts maturing by 2007.

The moves are aimed at strengthening Tenet's financial position as it continues to try to recover from a series of legal and financial woes. The company is also shedding dozens of hospitals as part of a restructuring effort.

Ex-lender gets jail time

A federal judge in June sentenced a former executive of National Century Financial Enterprises to four years in jail after she admitted keeping fake books at the now-bankrupt medical accounts receivables financing company.

Sherry Gibson, formerly the executive vice president and chief compliance officer at Dublin, Ohio-based NCFE, pleaded guilty to conspiracy to commit securities fraud in 2003. She admitted she maintained accounting records for the company marked as "actual" and "reported."

It was the first time an executive of the NCFE was sentenced to prison. Gibson also faces a civil lawsuit by the U.S. Securities and Exchange Commission, which is pending.

The Chapter 11 bankruptcy of NCFE in the fall of 2002 caused estimated losses of more than $2 billion for investors. The company before its unraveling had become the largest health care factoring firm, buying the outstanding receivables of financially troubled hospitals, physician practices and nursing homes at a discount.

The company invested heavily in bonds, which prosecutors say were inadequately backed by receivables revenues, and is accused of misleading investors on its financial health through manipulation of accounts.

MedQuist delisted from NASDAQ

MedQuist Inc., a Marlton, N.J., medical transcription company, was delisted on June 16 from the NASDAQ National Market for failing to file financial reports with the Securities and Exchange Commission.

The company said it will file all required regulatory filings, including its 2003 annual report and quarterly report for the quarter ended March 31, 2004, after an investigation of its billing practices is completed. Meanwhile, MedQuist will seek to have its stock quoted on National Quotation Bureau's Pink Sheets service but said there is no assurance that it will succeed.