Health Maintenance Organizations

Some of the largest U.S. health insurers said they would pay for an expensive pacemaker-like device despite Medicare's refusal to cover it for all the patients who might benefit from it. The $25,000 stopwatch-sized device, the implantable cardioverter-defibrillator, can restart a stopped heart or shock a failing heart back into rhythm. Only the sickest one-third of patients who device makers say can benefit from defibrillators won coverage last week from the U.S.

A bid by Cypress-based PacifiCare Health Systems Inc., to expand in Southern California by acquiring bankrupt Maxicare Health Plans Inc. of Los Angeles ran aground Wednesday after negotiations broke off. In separate statements, both health maintenance organizations confirmed that the talks ended abruptly and that no further discussions are contemplated on PacifiCare's preliminary offer. Neither company would disclose details of the offer, which was made public last Thursday.

Clinton Administration officials say they will not push Medicare patients to join health maintenance organizations, partly because the government loses money on them, the New York Times reported. Bruce C. Vladeck, head of the agency that runs Medicare, said he would not aggressively promote HMOs until he could guarantee consistent high-quality care and a better way of paying for it, the newspaper reported.

Health regulators announced fines totaling $227,500 against 25 health maintenance organizations for failing to notify members about their right to register complaints through a toll-free 800 telephone number. The largest fine issued was a $40,000 penalty against CaliforniaCare Health Plans of Woodland Hills. Since January, state Department of Corporations Commissioner Keith Bishop has levied similar fines against 80 of the state's 116 HMOs.

Health-maintenance organizations that withhold poor performance ratings are distorting results of a system that compares the quality of U.S. health-care plans, researchers said. A review found that a quarter to a half of health plans that gave their scores to the National Committee for Quality Assurance in the late 1990s didn't make them public the next year. Those with the worst rankings were as much as five times more likely to withhold results the following year.

The financial solvency of 80 California health maintenance organizations will be examined by Arthur Young & Co. under a contract from the state Department of Corporations. Under the agreement, the audits--required by state law--will be performed over a two-year period. The accounting firm will be paid about $784,000 for the first year.