News in brief - July 12, 2004

Maryland commissioner moves to Amerigroup - HealthSouth hires new COO

Maryland commissioner moves to Amerigroup

A former insurance commissioner of Maryland who stopped WellPoint Health Networks from buying the state's Blues plan has been named chief executive of a regional division of an HMO network.

Steven B. Larsen in June was to take control of the Maryland and District of Columbia segments of Virginia Beach, Va.-based Amerigroup Corp., a managed care network that sells policies to patients enrolled in Medicaid and other government programs, such as Maryland's State Children's Health Insurance Program.

Larsen rejected CareFirst BlueCross BlueShield's application to convert to a for-profit company in March 2003, causing WellPoint to drop its bid to buy it.

HealthSouth hires new COO

Former HCA division President Mike Snow was named HealthSouth's new chief operating officer June 23, effective one week later. His appointment came a little more than a month after another former HCA division president, Jay Grinney, was named HealthSouth's president and chief executive officer.

Snow had served as president of HCA's Gulf Coast Division since 1996.

HealthSouth has been overhauling its leadership as it tries to recover from an accounting scandal that has snared many of its former top executives. Federal prosecutors have accused the company of overstating earnings by at least $2.7 billion.

At least 17 former employees have agreed to plead guilty to various criminal charges, and ousted chief executive Richard M. Scrushy is awaiting trial for fraud.

On June 19, former chief financial officer Michael Martin was sentenced to six months of home detention and five years of probation for his role in the scandal. U.S. Chief District Judge U.W. Clemon also ordered him to pay $50,000 in fines and forfeit $2.4 million in profits. Prosecutors had sought jail time.

Meanwhile, the Birmingham News reported June 23 that a grand jury had opened a public corruption probe into whether HealthSouth exerted influence that caused a state board's rejection of a hospital's request to open a new MRI scanner. Prosecutors declined to comment on the probe.