Wellpoint Health Network Inc

Acting on an administrative recommendation, the City Council's Budget and Finance Committee approved a report Tuesday that rejects a tax rate reduction requested by several health maintenance organizations based in Los Angeles. It also approved a recommendation that a special tax code be created that would tax HMOs only on work done within the city limits.

City administrators have recommended against lowering tax rates for health maintenance organizations, dealing a potential financial blow to five HMOs that had sought tax breaks. The recommendation was made in a report, released late Friday to the City Council's Budget and Finance Committee, that was prepared by the city administrative officer, chief legislative analyst and city clerk.

After months of intensive negotiations, city officials are putting the final touches on a proposal to knock off millions of dollars from taxes paid by local health maintenance organizations--but not as much as the local companies had requested.

After months of intensive negotiations, city officials are putting the final touches on a proposal to knock off millions of dollars from taxes paid by local health maintenance organizations--but not as much as the local companies had requested.

Five health maintenance organizations that threatened to leave Los Angeles if they were not granted a $15-million tax break are nearing a compromise with the city that they say will keep them from leaving. "The momentum is all moving toward a resolution that keeps those companies in Los Angeles and keeps their jobs here," said Gary Mendoza, Mayor Richard Riordan's deputy for economic development.

The competition for four HMOs here and a fifth downtown, which prompted Mayor Richard Riordan last week to endorse a $15-million tax break, is a potentially corrosive process that many cities have begun abandoning in favor of regional cooperation, experts say.

In a sharp turnaround, Mayor Richard Riordan's office Thursday endorsed an immediate tax break for five health care organizations that have threatened to leave Los Angeles unless their business taxes are dramatically cut. Riordan's office had earlier hedged on the controversial tax break, saying it could wait a few weeks while the city completes a preliminary comparison of taxes for all businesses in Los Angeles and neighboring cities.

Health Systems International Inc. said Monday that it spent $20 million--about $10 for each of its nearly 2 million members--to pay lawyers, investment bankers and other expenses related to its failed merger with WellPoint Health Networks Inc. The report is the first official accounting of how costly the nine-month merger attempt was.

Wasting little time after an aborted merger attempt, WellPoint Health Networks on Monday said it is acquiring the health insurance business of Massachusetts Mutual Life Insurance for about $380 million in cash. The merger would expand WellPoint's operations into all 50 states, giving it 4 million members and making the Woodland Hills-based company the second-largest publicly held managed-care firm, after United Healthcare Corp.

Blue Cross of California said Sunday that its 18-member board, at a special meeting, voted unanimously to express its "unqualified support and confidence" in Leonard D. Schaeffer, chairman and chief executive, who has come under criticism from several board members for recent management actions. The nonprofit health-care organization also said that within three weeks it would file an amended plan to create a public health-care foundation.