News in brief - May 16, 2005

Big Blue targets health care market - Hospital faces property-tax fight - Tenet could face SEC action - MinuteClinic expands

Big Blue targets health care market

IBM Corp. announced in April plans to develop a system targeting the emerging regional health information organization market.

RHIOs -- local networks that link and enable doctors, hospitals and others to share patient information electronically -- are a key component in the federal government's plan to implement a national health information network.

The Armonk, N.Y.-based technology giant plans to start testing its system before the end of the year.

Hospital faces property-tax fight

Another Illinois hospital could lose its property-tax exemption after a review board concluded that the nonprofit hospital was failing to live up to its charitable mission.

In an April 21 report, the Champaign County Board of Review said it was recommending that the Illinois Dept. of Revenue deny the tax-exempt status for Carle Foundation, a nonprofit organization that runs the 295-bed Carle Foundation Hospital in Urbana as well as several other health care entities.

The report cited concerns about how much charity care the hospital provided, its pricing and collections practices and its relationship with a for-profit multispecialty physician group.

Carle Foundation estimates it would pay about $1.7 million in property taxes if it loses the exemption. In a written statement, the foundation said that would threaten its ability to serve patients. The state revenue department did not reveal any timetable for it to make a decision.

The report comes a little more than a year after the state revenue department denied a request for a charitable property tax exemption for Provena Covenant Medical Center, a nonprofit, 270-bed acute care hospital in Urbana. The revenue department's action followed the recommendation of the Champaign County review board. Provena appealed the decision and is awaiting a ruling.

Tenet could face SEC action

The Securities and Exchange Commission is considering bringing action against Tenet Healthcare Corp. and six former executives for alleged securities violations, the troubled hospital chain said.

Tenet announced on April 27 that it had received notification from the SEC that investigators were going to recommend bringing civil enforcement action against the company, former chief executive Jeffrey Barbakow and five other leaders who stepped down in 2002 and 2003 amid a series of legal and financial woes at the company.

The SEC's concerns center on Tenet's disclosures in financial reports related to Medicare outlier reimbursements as well as stop-loss payments under managed care contracts, the Dallas-based hospital chain said.

Tenet said it was cooperating with the SEC and would have an opportunity to respond to the notices before any formal action was brought.

The company voluntarily changed its outlier billing practices in 2003, a few days before the U.S. Dept. of Justice sued, claiming Tenet had overbilled Medicare. The company also faces a civil racketeering lawsuit by the Florida attorney general over outlier reimbursements.

MinuteClinic expands

MinuteClinic, a Minneapolis-based health care company that owns and operates small clinics staffed by physician extenders at retail locations such as pharmacies and supermarkets, announced in April it would open three clinics at CVS drug stores in Minnesota and Maryland.

The company, which staffs its sites with physician assistants and nurse practitioners, already has 21 clinics and has been in operation since 2000. The clinics offer basic, nonurgent medical care on a no-appointments basis and clearly advertise at the store how much procedures or vaccinations will cost. The company says that it has treated more than 220,000 patients in its four years in business.

MinuteClinic, which accepts most major medical insurance, is expected to open the new clinics in June.