Managed Care Report

• Blue Cross and Blue Shield of South Carolina (BCBSSC; Columbia, SC) saved the federal government $1 billion in Medicare payments in 1999, reported The State of Columbia, SC. According to a BCBSSC report, the savings came from claim reviews that made sure improper Medicare claims were not paid. Palmetto Government Benefits Administrators, a BCBSSC subsidiary, is the largest administrator of Medicare claims in the country, The State reported. The jump from 1998 to 1999 came primarily from more audits of home health agencies that caught claims for services that Medicare does not cover, Palmetto Government said.

• UnitedHealth Group (Minneapolis) has been sued for racketeering in a suit that alleges its recently announced policy of allowing doctors to make the final decision in patient care is only a sham, reported Reuters English News Service. The suit also attacks the company for a widely hailed plan announced in November to stop overruling doctors, Reuters reported, but it is similar to a rash of other cases accussing HMOs of depriving patients of adequate treatment. The suit is being brought by a group of lawyers who previously sued six other HMOs. United said it has not see the lawsuit yet, but believes, based on recent legal decisions in other HMO cases, that it will be found without merit, Reuters reported.

• Trigon Healthcare (Richmond, VA) posted a 4Q99 ended Dec. 31 net income of $27.6 million, 70 cents per share, a sharp drop from 4Q98 net income of $48.6 million, $1.13 per share. The decrease is in part from the impact of Trigon’s Mid-South Insurance unit’s withdrawal from the health insurance market. Trigon said its 4Q99 and 4Q98 earnings included unspecified realized investment gains. The company reported revenues of $1.7 billion, an 8.7% increase from 4Q98 revenues of $1.5 billion. During 4Q99, the company repurchased almost 2.3 million of its shares at an average price of $28.55 per share, bringing the total to about 4.1 million shares repurchased as of the end of December.

• PacifiCare (Santa Ana, CA) President/CEO Alan Hoops is planning to leave the company, and despite rumors of being forced out by board members, Hoops said the decision to leave is his own. Hoops said that in his 20 years at PacifiCare, he has focused on the company’s early entrepreneurial rapid growth phases, but now that it has been built into a $10 billion business and its fundamentals are strong, he said it is time to step aside. Hoops will retire, effective March 2001.

• Coventry Health Care (Bethesda, MD) signed a three-year deal with Healtheon/WebMD Corp. (Atlanta) in which Healtheon/WebMD will implement Coventry’s Internet strategy. Initially, Coventry will use Healtheon/WebMD’s Internet services to manage electronic claims submission and processing of eligibility determination, referrals, and authorisations. The deal will increase the number of physicians who use WebMD Practice, Healtheon/WebMD’s professional portal, and increase the number of transactions that the company processes annually.

• Blue Cross and Blue Shield of Michigan (Detroit) named Daniel Loepp vice president of governmental affairs. Loepp is the author of the book Sharing the Balance of Power -- An Examination of Shared Power in the Michigan Legislature 1993-1994 and was previously an associate with Karoub Associates, a lobbying and governmental consulting firm.

• WellPoint Health Networks (Thousand Oaks, CA) posted a net income for 4Q99 ended Dec. 31 of $80.7 million, $1.20 per share, including the extraordinary gain from early extinguishment of debt, compared to a 4Q98 net income of $67.4 million, 99 cents per share. The company saw total revenues of $2 billion, down from 4Q98 revenues of $1.7 billion.

For the year, the company reported total revenues of $7.5 billion, compared to total revenues in FY98 of $6.5 billion. WellPoint posted a FY99 net income of $278.5 million, up from a FY98 net income of $231.3 million.

Mid Atlantic Medical Services (MAMSI; Rockville, MD) reported a FY99 ended Dec. 31 net income of $26.3 million, 64 cents per share, compared to a FY98 net income, prior to one-time accruals, of $19.3 million, 42 cents per share. MAMSI saw FY99 revenues of $1.3 billion, an increase of $129 million, or 10.9%, over $1.2 billion in FY98.