News in brief - Oct. 17, 2005

GE Healthcare acquires IDX - WebMD Health's IPO soars - Blues offers records for Rita patients - Ex-HealthSouth CFO sentenced - HHS proposes attachment standards

GE Healthcare acquires IDX

GE Healthcare, a subsidiary of General Electric Co., on Sept. 29 agreed to acquire IDX Systems Corp. for $44 a share in a cash transaction valued at about $1.2 billion.

The acquisition, which must be approved by regulators and IDX shareholders, is expected to close by early 2006. Both IDX, based in Burlington, Vt., and GE Healthcare, headquartered in the United Kingdom, sell administrative, financial, electronic medical records and other clinical systems. GE Healthcare serves small physician groups while IDX serves large groups and has a strong presence in academic group practices.

WebMD Health's IPO soars

WebMD Health Corp.'s initial public offering of stock closed at $24.40 on its first day of trading on Sept. 29, up 39% from its offering price of $17.50 a share. The offering raised about $192.5 million for the company.

The offering price was at the upper end of the range of $15.50 to $17.50 a share that WebMD Health's underwriters had set for 6.9 million shares.

Strong demand for the IPO, had led Morgan Stanley and Citigroup to raise the initial range of $13.50 to $15.50 a share for WebMD Health, a subsidiary of Emdeon Corp., formerly WebMD Corp.

New York-based Emdeon sells physician practice management software and medical-transaction processing services while WebMD Health sells online health information to physicians and consumers.

Blues offers records for Rita patients

BlueCross BlueShield of Texas and the Blues plans owned by WellPoint are offering authorized physicians access to electronic records of health plan members who were displaced by Hurricane Rita.

Separately, the Blues plan in Texas announced that it has changed several procedures to help evacuees access care, including waiving pre-authorization and referral networks, and paying in-network benefits to care received out of network for members affected by Rita.

Ex-HealthSouth CFO sentenced

Former HealthSouth chief financial officer Weston Smith has been sentenced to 27 months in prison, the longest jail term handed down so far in the massive accounting scandal at the outpatient services company.

U.S. District Judge Robert B. Propst also ordered Smith to serve one year of probation and forfeit $1.5 million in illegal proceeds for his role in the fraud. He was sentenced on Sept. 22.

Smith is one of 18 former HealthSouth executives charged with various crimes in the wake of an investigation into a $2.7 billion accounting fraud at the Birmingham, Ala.-based company. The longest sentence previously handed down had been a five-month jail term.

Ousted HealthSouth founder Richard M. Scrushy was accused of masterminding the scheme, but a jury acquitted him of all charges in June. Smith was one of several former executives who cooperated with prosecutors and testified at the trial.

Propst also sentenced former HealthSouth vice president Will Hicks to two years of probation, including three months of home detention, and ordered him to forfeit $50,000. Hicks had pleaded guilty to charges of conspiracy to commit wire fraud and securities fraud.

HHS proposes attachment standards

The Dept. of Health and Human Services published in the Federal Register in September its proposed rule to standardize certain electronic claims attachment transactions.

Under the proposed rule, HIPAA-covered entities would be required to use certain messaging standards and a new code set when they provide and respond to requests for clinical information for certain types of services being billed by doctors and hospitals to health plans. The rule would cover six specific types of attachments: laboratory results, emergency department services, ambulance services, medications, clinical reports and nine rehabilitation specialties. This proposed rule has a public comment period ending on Nov. 23.