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News in brief - Oct. 2, 2006

New group to study emerging tech - Aetna expands e-prescribing - Ex-HealthSouth exec sentenced - Bank of America buys HealthLogic - WellPoint reorganizes

New group to study emerging tech

The Blue Shield of California Foundation and the California HealthCare Foundation have contributed $905,000 to fund the startup of a nonprofit group that will study the effectiveness of emerging medical technologies.

The newly formed Center for Medical Technology Policy says it will provide a neutral forum where health care decision-makers, stakeholders and experts can work together to design research projects to provide evidence of real-world effectiveness and safety of new technologies, including surgical procedures, medical devices and diagnostics or pharmaceuticals.

The Health Technology Center, a San Francisco-based nonprofit research and education organization, will manage the effort.

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Aetna expands e-prescribing

Aetna announced Sept. 11 that it will expand an electronic prescribing initiative to physicians in three new markets on the East Coast.

Under the program, Aetna, which launched the program last year with 1,000 physicians in New Jersey, will subsidize the first-year cost of software and hardware for 700 high-prescribing physicians in New York, Hartford, Conn., and Portland, Maine.

To participate, doctors must use an electronic prescribing system from Dallas-based Zix Corp., which will recruit, install and provide support to physician offices under the terms of its contract with Aetna.

In other Aetna news, the company says it is returning to Colorado after five years without a presence there.

Aetna has returned to the market offering small-group health plans. Aetna is selling 13 plans, including two high-deductible plans that may include health savings accounts.

In 2000, Aetna was Colorado's second largest small-group carrier, but it pulled out of the state in 2001 because the plans were not profitable. Prior to re-entering Colorado, Aetna acquired HMS Healthcare in Denver last year. HMS contracts with doctors and hospitals to provide services at discounted rates, and sells access to its networks to health plans and self-funded employers.

Aetna said it plans to have 10,000 new members in Colorado by 2007.

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Ex-HealthSouth exec sentenced

Former HealthSouth chief financial officer Michael Martin has been sentenced to three years in prison for his role in the accounting scandal at the rehabilitation services company.

The Sept. 12 order, from U.S. District Judge L. Scott Coogler in Birmingham, Ala., marked the third time Martin has been sentenced in the case. Prosecutors successfully appealed two previous rulings, including one that ordered a seven-day prison term and one that sentenced him to probation.

Prosecutors said Martin, CFO from 1997 to 2000, was a key participant in the $2.7 billion accounting fraud at the company, which was spread out over several years and ultimately led to criminal convictions for 16 former HealthSouth executives.

In addition to the prison sentence, Martin was ordered to pay a $50,000 fine, serve two years of probation and forfeit nearly $2.4 million in illegal proceeds from the fraud.

In related news, several published reports said HealthSouth has been ordered to pay nearly $17 million in legal fees for ousted chief executive Richard Scrushy.

Scrushy was acquitted of any criminal wrongdoing in the accounting scheme but is still the focus of investigations by regulators.

Representatives for HealthSouth and Scrushy declined to comment on the reports citing confidential arbitration proceedings.

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Bank of America buys HealthLogic

Bank of America announced Sept. 11 that it acquired HealthLogic Systems Corp., Norcross, Ga., which provides billing, claims processing and revenue cycle management software and services to hospitals. Terms of the transaction were not disclosed.

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WellPoint reorganizes

WellPoint announced it's adapting a new corporate structure that will divide the company into two separate business units as the insurer said it plans to bring focus to local markets, reduce overhead expenses and bring emphasis to the company's consumer-directed health plans.

Beginning Nov. 1, the company will be organized around the commercial and consumer business, and the specialty, senior and state-sponsored business units.

Three regional business units and the national-accounts unit will be combined into the new commercial and consumer organization.

John S. Watts Jr., currently president and chief executive officer of the national accounts division, will become president and chief executive officer for the commercial and consumer business division. Joan E. Herman, president and chief executive officer for specialty, senior and state-sponsored business, will continue to oversee WellPoint's state-sponsored and senior business.

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