News in brief - Aug. 28, 2006

HMA shedding five hospitals - Insurer expands custom-benefit program to smaller employers - HealthSouth no longer operating overseas

HMA shedding five hospitals

Health Management Associates Inc. plans to sell five hospitals under two deals announced recently.

The Naples, Fla.-based hospital chain announced on Aug. 7 that it had reached an agreement to sell two psychiatric hospitals in Florida to Psychiatric Solutions Inc. of Franklin, Tenn. A few weeks earlier, HMA announced that it would sell three acute care hospitals to Shiloh Health Services Inc. of Nevada.

Terms of the deals, which were subject to regulatory approval, were not disclosed. However, Psychiatric Solutions said the two facilities it was buying -- 80-bed Sandy Pines in Tequesta, Fla., and 104-bed University Behavioral Center in Orlando, Fla. -- produced combined revenues of about $20 million in 12 months.

The acute care hospitals being sold were Southwest Regional Medical Center, 125 beds, in Little Rock, Ark.; Summit Medical Center, 103 beds, in Van Buren, Ark.; and Williamson Memorial Hospital, 76 beds, in Williamson, W.Va.

After completing the transactions, HMA said it would operate 57 hospitals in 14 states.

Insurer expands custom-benefit program to smaller employers

Cigna is expanding a program that allows customers to build their own insurance plans to include mid-sized employers with 500 or more employees in Connecticut, New Jersey and New York. Cigna's Custom Benefit Builder allows consumers to build a customized health benefits plan, which the company said can give employers a better fit for their own health care and financial needs.

Cigna said it's expanding the program to smaller employers because of increased interest. The program was introduced earlier this year to large employers nationwide.

Physicians expressed concerns because they feared they might not be aware of what is or isn't covered under the custom-designed plans until the procedure has been completely adjudicated. But Cigna said the Custom Benefit Builder is an enrollment tool only and once the member enrolls, the plans function as other Cigna PPO plans.

Using a Web-based program, consumers can compare and then personalize various co-payment and coinsurance levels, deductibles and out-of-pocket maximums. As the consumer inputs the choices into the program, it calculates how much the plan will cost, and consumers can then enroll for benefits.

HealthSouth no longer operating overseas

HealthSouth Corp. plans to sell a rehabilitation hospital and some related assets in Australia, its only remaining international holding.

The Birmingham, Ala.-based outpatient services giant announced on Aug. 4 that it had reach an agreement to sell Cedar Court Rehabilitation Hospital in Melbourne, Australia, along with an outpatient center, stand-alone rehabilitation facility and an occupational rehabilitation therapy business, to Epworth Foundation and ING Management Ltd., entities affiliated with a hospital and a property trust.

Terms of the deal were not disclosed.

Meanwhile, HealthSouth delayed filing its second quarter earnings report, saying in a document filed with the Securities and Exchange Commission that it had spent substantial time and resources trying to reconstruct its historic financial and accounting records in the wake of a massive accounting scandal, and that it was still trying to improve its internal controls over such reporting.

Practice management software company sold

Medical Manager is acquired by a company that provides accounting software to small offices.

--Tyler Chin, AMNews staff

Emdeon Corp., formerly WebMD Corp., announced Aug. 8 that it agreed to sell its Emdeon Practice Services unit, which is mostly known for its Medical Manager brand of physician practice management software, to a division of Great Britain's Sage Group plc for $565 million in cash.

Sage has about 7,000 physician offices as customers using its accounting products. With the acquisition of Tampa, Fla.-based Emdeon Practice Services, Sage gains 20,000 practice management software customers.

Sage said in a prepared statement that it hopes to integrate the sales of its accounting software with its newly acquired practice management system.

The company said its concentration will be on small practices.

Under the transaction, which is expected to close in September, the claims clearinghouse unit of Emdeon -- Emdeon Business Services -- will continue to be the exclusive provider of electronic health care transactions and patient statement services for Emdeon Practice Services through 2013. Emdeon Practice Services also will continue its relationship with WebMD Health Corp. and will exclusively integrate WebMD's online personal health record with its products.

Emdeon was acquired as Medical Manager in 2000, when WebMD was still known as Healtheon.

WebMD did not give specific reasons for selling Emdeon Practice Services, although industry analysts said WebMD had tended to concentrate more on other businesses -- which include a health Web site and a claims clearinghouse business.