News in brief - Sept. 6, 2004

R.I. Blues leader gets severance - Scrushy's trial reset - Tech firms ally in e-prescribing effort - MedQuist overhauls billing practices

R.I. Blues leader gets severance

The former president of BlueCross BlueShield of Rhode Island, who quit in May amid a tempest of accusations about corporate financial practices and poor treatment of doctors, is to get a severance package of more than $3.1 million and is not being required to pay back a loan of $600,000 given to him by the plan, the Providence (R.I.) Journal reported.

Shortly before leaving the Blues plan, Ronald A. Battista had said he would repay the loan, which was used to pay for a divorce settlement and a new house.

But Frank J. Montanaro, the company's chair, said in August that the issue of repaying the loan never was raised in negotiations for a separation agreement between Battista and the plan's lawyers.

The agreement gives Battista his $546,500 in salary and more than $600,000 in supplemental retirement benefits over the next two years, and he is eligible to get more than $82,000 annually from a Blue Cross retirement plan for the rest of his life, the newspaper reported.

Battista resigned without comment after being accused by the state medical society and other health care professional groups as being arrogant, unresponsive and mismanaging the company.

Scrushy's trial reset

A federal judge has rescheduled the fraud trial for ousted HealthSouth founder Richard M. Scrushy to begin on Jan. 5, 2005.

The jury trial in federal court in Birmingham, Ala., had been scheduled to start on Aug. 23, but U.S. District Judge Karon O. Bowdre pushed the date back in an order filed Aug. 16.

Scrushy has been accused by federal prosecutors of being the mastermind behind a $2.7 billion accounting scandal at HealthSouth. A grand jury returned an 85-count indictment against Scrushy in November 2003, with charges ranging from conspiracy to securities fraud. Scrushy has denied all charges against him.

Scrushy was fired from HealthSouth after the scandal was revealed in March 2003. Since then, at least 19 former executives at the outpatient services giant have faced criminal charges stemming from the investigation.

Tech firms ally in e-prescribing effort

Several health care technology companies have formed a coalition to accelerate physician adoption of electronic prescribing. Called Café RX, the coalition will seek, among other things, to educate physicians and their staff about the value of e-prescribing. The backers said it would also support lobbying efforts at the state and federal levels to offer financial incentives to clinicians who prescribe electronically.

The founders of the coalition include technology vendors Allscripts Healthcare Solutions Inc., Cisco Systems Inc., Hewlett-Packard Co., Microsoft Corp., NDCHealth Corp., RxHub LLC and SureScript Systems Inc. A pharmacy standards group, the National Council for Prescription Drug Programs, and a consulting firm, Capgemini, also are founding members of Café RX. More information is available online (www.caferx.org/CafeRx.htm).

MedQuist overhauls billing practices

MedQuist Inc., Mount Laurel, N.J., announced on July 30 that it changed its billing practices after an independent investigation uncovered a problem with how it had billed certain customers.

Specifically, the medical transcription company used ratios and formulas to determine the number of billable lines rather than counting the number of relevant characters as required under certain contracts. As a result, some clients were overcharged while others were undercharged, MedQuist said.

MedQuist now is assessing the financial impact the questionable billings had on clients and on itself. Until that assessment and audit are completed, the company will not be able to file its 2003 annual reports and 2004 quarterly reports. The company's failure to file some of those reports led the NASDAQ to delist the company on June 16.

Meanwhile, MedQuist also disclosed that the SEC has launched a formal investigation of the company.