News in brief - Nov. 15, 2004

Tenet kickback trial opens - AHRQ awards multimillion grant - Group urges health infotech charity - Illinois Blues fire accused ID thief - Dialysis companies receive subpoenas

Tenet kickback trial opens

As a trial opened in San Diego accusing Tenet Healthcare Corp. of paying illegal kickbacks to physicians to boost patient referrals, the hospital chain reaffirmed its support of the physician recruitment practices at the center of the case.

On Oct. 26, the day opening statements in the case began, Tenet issued a written statement defending itself, saying the hospital involved had worked diligently and honestly to abide by the complex rules governing physician relocation agreements.

"Tenet believes that the physician relocation agreements entered into by Alvarado Hospital Medical Center were appropriate and legal under federal laws and regulations," the statement said.

But federal prosecutors painted a much different picture. They alleged that Alvarado and another Tenet subsidiary paid more than $10 million to fund more than 100 physician relocation agreements between 1992 and 2002 to recruit medical services to the hospital's service area. But they claimed that a "substantial portion" of the money went to established doctors to induce them to make referrals to Alvarado.

Former Alvarado Chief Executive Barry Weinbaum and former Associate Administrator Mina Nazaryan also have been indicted for their alleged roles in the case.

The jury trial in U.S. District Court is expected to last two to four months.

AHRQ awards multimillion grant

The Agency for Healthcare Research and Quality has awarded a two-year, multimillion-dollar grant to the National Opinion Research Center at the University of Chicago to establish and operate the National Health Information Technology Resource Center.

NORC will provide technical and other assistance to entities that received federal funding to create statewide and regional health information networks.

Under the two-year grant, which is renewable for up to three years and has an estimated value of $18.5 million, NORC will receive $4 million in first-year funding.

Group urges health infotech charity

The National Business Group on Health has developed guidelines to encourage corporate donations to advance the use of information technology in health care.

The Washington, D.C., nonprofit group, which represents 220 large employers, recommended in October that corporate charitable foundations focus on promoting improvements in information technology, invest in computerized physician order entry, support training initiatives and demand evidence from health care providers to justify proposed expansion plans.

Illinois Blues fire accused ID thief

An employee of Chicago-based BlueCross BlueShield of Illinois was fired after being accused of stealing information relating to patients' identities, including names and Social Security numbers, and giving them to cohorts outside the company in a scam to illegally buy cellular telephones.

The actions of the employee, whom the company would not identify, were uncovered by the payer's special investigations department in conjunction with several state and federal law enforcement agencies, according to a memo to Blues employees by Ray McCaskey, president and CEO of Health Care Service Corp., the insurer's parent.

Confidential information for about 60 plan members was taken from claim forms by the employee and given to others as part of the fraud, according to Tony Rau, a plan spokesman. All of those members have been contacted by the company, he said.

The Blues plan itself is not under investigation, he said.

In his Oct. 22 memo to employees, McCaskey said the company had "enhanced our procedures to protect the privacy of our members' financial information."

Dialysis companies receive subpoenas

Two of the country's leading dialysis service companies announced in late October that they had received federal subpoenas for documents related to their dialysis operations and laboratory services.

DaVita Inc., based in El Segundo, Calif., and Renal Care Group Inc., based in Nashville, Tenn., both said they received requests for information related to testing for parathyroid hormone (PTH) levels and vitamin D therapies.

DaVita boasts nearly 52,000 patients in 35 states, operates 611 dialysis centers and provides services in more than 330 hospitals across the country.

Renal Care, meanwhile, has nearly 30,000 patients and owns 410 outpatient dialysis facilities.