News in brief - Dec. 12, 2005

Premera to test online visits - HHS awards contracts for health network - Former HMO officials indicted - Allscripts seeks $200 million - Visa, Blues team up on debit card - Physician software company expands

Premera to test online visits

Premera Blue Cross has announced that on Jan. 1, 2006, it will begin an 18-month pilot under which it will reimburse physicians for online visits with established patients.

About 100 physicians who are affiliated with Virginia Mason Medical Center in Seattle and who have PPO patients employed by Microsoft Corp. will participate in the pilot. The Mountlake Terrace, Wash.-based health plan said it will use pilot results to determine whether it will expand reimbursement for online visits to additional members and physicians.

Separately, Kaiser Permanente, Oakland, Calif., rolled out a free e-mail service in November that enables its 3.2 million members in northern California to communicate securely with their doctors and access laboratory results and other data online. The online service is part of Kaiser's ongoing $3.3 billion national electronic medical records initiative, parts of which have already been rolled out in the Pacific Northwest, Colorado and Hawaii.

HHS awards contracts for health network

The Dept. of Health and Human Services on Nov. 10 awarded contracts totaling $18.6 million to four consortiums led by technology vendors to develop prototypes for a national health information network architecture.

Under the contracts, a partnership of technology companies with physicians and health care organizations in three local markets per consortium will design and implement different standards-based network architectures over the next 12 months.

At the end of that year, HHS will evaluate and pick the best features of each prototype, bringing them together into a flexible networking architecture that is expected to guide HHS' efforts to pursue a national health information network within 10 years

The vendors involved are Accenture, New York; Computer Sciences Corp., El Segundo, Calif.; IBM Corp., Armonk, N.Y., and Northrop Grumman Corp., Los Angeles.

Former HMO officials indicted

Consultant Barry Scheur bought up struggling HMOs, promising to transform them into physician-friendly and patient-friendly health plans.

Instead, Scheur's plans, called The Oath, fell into financial ruin, and now he and two other former Oath executives are accused of lying about one affiliate's financial health.

A federal grand jury in Houma, La., on Nov. 18 indicted Scheur, Robert McMillan and Rodney Moyer on charges of one count apiece of conspiracy and mail fraud related to financial documents regarding The Oath of Louisiana filed with the state Dept. of Insurance between September 2000 and December 2000. If convicted, each could face a prison term of up to 10 years on the mail fraud charge and up to five years on the conspiracy charge.

Neither McMillan and Moyer, nor their attorneys, had responded publicly to the charges at press time. However, Scheur's attorney denied any wrongdoing by his client, a Massachusetts-based consultant who had worked as an HMO attorney and an HMO turnaround specialist before establishing The Oath.

According to U.S. Attorney Jim Letten, the documents claimed The Oath of Louisiana's net worth was high enough to cover potential claims from its policyholders.

By the time Louisiana placed the company under receivership in April 2002, its liabilities were $45 million greater than its assets, Letten said.

At that time, The Oath, with 82,000 members, was the state's third-largest HMO, and regulators estimated it owed hospitals, physicians and pharmacists up to $40 million.

Allscripts seeks $200 million

Allscripts LLC, Chicago, is planning to raise up to $200 million by selling stock, debt and other securities to the public from time to time, according to a document the company filed Nov. 18 with the Securities and Exchange Commission.

Allscripts, which sells electronic prescribing and electronic medical records software to physicians, said it plans to use the money for general corporate purposes, including working capital, repayment or reduction of long-term and short-term debt and acquisitions.

Visa, Blues team up on debit card

The BlueCross BlueShield Assn. and Visa USA have teamed up for a co-branded debit card plan members may use to pay for health care-related expenses.

The association said it's the first time Visa has partnered with an insurance group to offer a health savings account-related debit card.

The card would be linked to flexible spending accounts and health savings accounts. So far, four state Blues plans -- Idaho, Louisiana, New Jersey and South Carolina -- have said that they will offer the card to their members.

Plans are offering debit cards with the idea they would be more convenient to patients in tracking their medical expenses, as well as eliminating the need to submit reimbursement forms. Physicians should see faster payments as the debit card process eliminates the traditional personal check processing step, BlueCross BlueShield spokesman Chris Hamrick said.

Visa is not the first major credit-card company to get into the health debit-card business. Last year, UnitedHealth Group issued a MasterCard debit card through its own bank, Exante.

Physician software company expands

TriZetto Group Inc. announced on Nov. 21 that it signed a definitive agreement to acquire CareKey Inc. for $60 million in cash.

Under the deal, TriZetto, a Newport Beach, Calif., company that sells software to insurers and physicians, may make an additional payment of $40 million if certain financial milestones are met. CareKey, Boston, sells personal health records, disease management, case management and utilization management software.