News in brief - Aug. 14, 2006

More personal health records - Automakers extend prescribing pilot - Tufts drops consumer-directed plan - Privacy breach shuts down tech project - Cigna expands HRA business - Ex-HealthSouth CFO must pay $6.9 million

More personal health records

WellPoint Inc., the country's largest private-pay insurer, has launched an initiative offering members access to services intended to help them stay healthy and better coordinate their care with physicians.

A key component of the 360 Health program, which is available in Georgia and New York and will be rolled out to all WellPoint's 34 million members during the next 16 months, is an online personal health record that members can print and share with their physicians.

Separately, the Robert Wood Johnson Foundation has issued a request for proposals to stimulate innovations in personal health information technology. The goal of the $3.5-million initiative, Project HealthDesign: Rethinking the Power and Potential of Personal Health Records, is to encourage technology pioneers to design PHR systems in ways that empower patients to better manage their health and health care. The foundation will issue up to 10 grant projects.

Automakers extend prescribing pilot

The Big Three automakers have committed to invest more than $1 million to extend their 18-month-old electronic prescribing pilot in Michigan for another year, the Detroit Free Press reported. Since General Motors Corp., Ford Motor Co. and DaimlerChrysler Corp. launched their initiative, more than 1,400 physicians have signed up to receive free technology and financial incentives to prescribe electronically.

Tufts drops consumer-directed plan

A Massachusetts health plan says it is phasing out what was its first consumer-directed health plan. But the company said the move is more about the specific structure of the plan, and not its feelings on the future of consumer-directed health.

Liberty, operated by Tufts Health Plan and Destiny Health Inc. and its South African parent company, Discovery Holdings Ltd., hasn't attracted enough participants since it was introduced in the spring of 2003, Tufts said. The plan covers about 10,000 people in Massachusetts, compared with about 600,000 overall Tufts members.

Tufts CEO James Roosevelt Jr. said Liberty didn't succeed because it was ahead of its time in Massachusetts, and people weren't prepared for the concept of paying an out-of-pocket deductible before the insurance started paying for health care. Employers also complained about reimbursement complications for vouchers employees received for healthy habits.

Company officials said ending the partnership between Tufts and Destiny Health was a mutual decision.

Tufts has more than 150,000 members enrolled in consumer-directed plans other than Liberty, so the company said its commitment to such plans remains strong. Tufts officials said Liberty members will have the opportunity to enroll in another consumer-directed health plan, or they can choose a different plan offered by their employer.

Destiny still has an alliance with Guardian Life Insurance Co. of New York to market consumer-directed health plans in Illinois, Maryland, Virginia and Washington, D.C. The companies plan to expand their offerings nationwide, starting next with Texas.

Privacy breach shuts down tech project

Georgetown University Hospital in Washington, D.C., last month shut down its electronic prescribing pilot after it learned that the personal data of 5,600 to 23,000 patients had been exposed, Wired News reported on July 25. The security breach occurred when an Indiana-based technology consultant accidentally discovered a cache of data, including names, addresses, Social Security numbers and dates of births, but not medical data, of patients at the Washington, D.C.-based hospital, while working to install medical software for a client, Wired News said.

Cigna expands HRA business

Cigna said it will expand the Choice Fund Health Reimbursement Arrangement plans to businesses with 51 to 200 employees in markets where the fund had previously been available to employers with more than 200 employees.

Dennis Wilson, president of Cigna's Healthcare small business segment, said extending the program to Georgia, Illinois, Indiana, Maryland, Michigan, Missouri, Ohio and Washington, D.C., gives small businesses the same access to Cigna programs as large businesses. Wilson said the program helps employers manage costs by helping employees be more engaged in their health care decisions.

With an HRA, as opposed to a health savings account, only the employer sets aside funds for the account portion of the plan. If an employee leaves, any unused dollars stay with the employer.

Ex-HealthSouth CFO must pay $6.9 million

Former HealthSouth chief financial officer Weston L. Smith has been ordered to pay $6.9 million for his role in the massive accounting fraud at the outpatient services giant.

The order was part of the final judgment issued by U.S. District Judge L. Scott Coogler in Birmingham, Ala., on July 14 in a civil case brought by the Securities and Exchange Commission, the SEC said. The securities regulator had sued in 2003, alleging that Smith directed HealthSouth employees to make false accounting entries to boost the company's earnings.

In a related criminal case, Smith was previously sentenced to serve 27 months in prison. He was one of 16 former HealthSouth executives convicted of criminal charges in the accounting fraud.

Smith must first pay the $1.5 million that he was ordered to pay in the criminal trial before settling up the civil case.