News in brief - June 6, 2005

Fla. OKs assignment of benefits - WebMD Health files for IPO - Tenet hospital back in court - Oregon, N.J. explore building health networks

Fla. OKs assignment of benefits

In the waning hours of the 2005 Florida legislative session, a bill was passed that included a provision allowing patients to instruct their insurer to reimburse directly any physician participating in emergency care.

David Siegel, MD, vice president of the Florida College of Emergency Physicians, said assignment of benefits had been an issue because if a physician was not a participant in the patient's health plan, then he or she would have to bill the patient, rather the insurer. In many cases, the physician would never get paid.

The Florida Medical Assn., in a statement on its Web site, said it supported the passage of the assignment-of-benefits legislation, and said it hopes a future bill will pass that extends the language to include every physician in any care setting.

Florida becomes the 12th state to pass such legislation. Kansas, New York, North Carolina, Ohio and South Carolina have assignment-of-benefits legislation under consideration, although their bills do not include care delivered in nonemergency settings.

WebMD Health files for IPO

New York-based WebMD Health Holdings Inc., a subsidiary of Elmwood Park, N.J.-based WebMD Corp., on May 12 filed with the Securities and Exchange Commission for an initial public offering of stock.

According to the SEC filing, WebMD Health Holdings will change its name prior to completing its IPO. But the new name, which hasn't been decided upon yet, will include WebMD.

The proposed IPO on the Nasdaq National Market would raise up to $50 million.

The spin-off of WebMD Health would effectively separate WebMD's two major forms of business: the health information content portals of WebMD Corp.; and Medscape, the physician online information portal.

WebMD Health's portal business earned a net income of $6.5 million on sales of $134.1 million last year.

The parent company would hold onto subsidiaries that process health care transactions, under the WebMD Envoy name, and sell practice management software, under the WebMD Practice Services name.

Tenet hospital back in court

For the second time, a trial is under way to determine if a Tenet Healthcare Corp. hospital paid kickbacks to doctors to induce referrals.

The retrial of the case involving Alvarado Hospital Medical Center, San Diego, began May 4 in U.S. District Court in San Diego. The original case ended on Feb. 17 with a mistrial.

Prosecutors have alleged that Alvarado and another Tenet subsidiary paid more than $10 million for physician relocation agreements between 1992 and 2002. They claimed a "substantial portion" of the money went to established doctors to induce them to make referrals to Alvarado.

Alvarado's former chief, Barry Weinbaum, is also named as a defendant.

Oregon, N.J. explore building health networks

Oregon and New Jersey officials are exploring creating statewide health networks enabling physicians, hospitals and others to exchange patient data. New Jersey launched its effort on May 11. On May 9, the Oregon Senate passed a bill to establish a task force to explore the issue, moving the measure to the House.

The two states are among several, including Florida and Kentucky, that have recently moved to explore implementing statewide networks as a way to improve patient care and reduce costs.