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HIP OF NEW YORK HIT FOR $22 MILLION IN FRAUD CASE

Following a civil jury verdict, a Florida court ordered HIP of New York to pay $22 million after being found liable by a jury for fraud arising from its sale of HIP of Florida to Vista Health Plans of Florida, some five years ago. The case was based upon the allegation that HIP had hidden key financial information when it sold HIP of Florida to Vista for $40 million in 2000. The jury also said Vista did not have to repay a $16 million note to HIP of New York. According to Florida officials, Vista poured in million of dollars to in order avert the near collapse of the corporation that had been caused by the hidden costs. HIP, it is reported, is planning an appeal.

STUDY FINDS MALPRACTICE PREMIUMS TO BE OUT OF STEP WITH VERDICTS AND SETTLEMENTS.

A study released earlier this month by a consumer advocacy group, found that claims for medical malpractice paid by leading insurance companies remained flat over the last five years, while premiums have increased at an astounding rate of 120 percent. Indeed, the increase in premiums collected by the insurance companies examined was twenty-one times greater than the increase in claims paid. Additionally, the stock prices of the three publicly traded companies examined, had each risen more than one-hundred percent since May 2002. Insurance industry officials dispute the findings and claim that the study fails to account for substantial reserves set aside for pending claims.

HOUSE APPROVES CREATION OF DATABASE FOR THE REPORTING OF MEDICAL ERRORS.

As part of an effort purported to reduce medical errors, a House subcommittee recently approved legislation that encourages reporting of medical errors by establishing a database of reports from physicians, hospitals and other providers from which trends or ominous patterns may be discerned, addressed and corrected. According to the bill, the information would be inadmissible in malpractice cases. A U.S. Senate subcommittee approved similar legislation earlier this year and, if the House bill passes, the legislation will necessarily become the subject of a conference committee of both houses of Congress before the legislation is sent to the White House for the president's approval.

GOVERNMENT ISSUES REPORT ON CREATION OF NATIONWIDE HEALTH INFORMATION NETWORK.

The Department of Health and Human Services recently released a report concerning the manner in which a nationwide health information network (ANHIN@) should be developed. The consensus of health care providers responding to HHS's request for input was that: (i) a decentralized system that relies upon the internet should be created; (ii) an governing body composed of public and private entities should oversee the promulgation of rules and policies and (iii) the network should contain sufficient safeguards to protect the privacy of personal health information. Major challenges to developing and adopting a NHIN include the the technical challenges involved with assuring confidentiality, securing necessary funding resources, network access and the challenges posed by a conflicting array of state and federal regulations.

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