Radiance Conserving Cash; PacifiCare Touts Quality Ranking
A good part of California’s congressional delegation,including several Republicans representing Orange County,are getting behind hospital organizations in their bid to halt a federal proposal they claim threatens Medicaid funding.
The California Hospital Association and other industry groups, including the University of California medical centers and the California Children’s Hospital Association, claim the proposal would result in a loss of at least $300 million to California’s “safety net” hospitals. Safety net facilities include public, private, teaching and children’s medical centers.
Specifically, a rule change is being considered that would reduce from 150% to 100% the Medicaid upper payment limit for public hospitals.
The upper payment limit rule allows public hospitals and health systems in the aggregate to receive Medicaid payments up to 150% of what Medicare would otherwise pay for similar services, whereas an aggregate limit of 100% is applied to state-owned hospitals and private hospitals.
MediCal’s supplemental payment program was created in 1990 as a way to boost emergency rooms and trauma centers at safety-net facilities. The higher payment limit was established in recognition of higher costs associated with treating low-income people, according to the California Hospital Association.
Late last month, 47 of California’s 52 members of the House of Representatives signed a letter to U.S. Health and Human Services Secretary Tommy Thompson asking him to uphold a “delicate, bipartisan agreement” reached by Congress last year concerning Medicaid funding. The signers included Reps. Edward Royce, R-Fullerton, Loretta Sanchez, D-Garden Grove, and Darrell Issa, a freshman GOP representative whose district includes portions of South County.
Meanwhile, Rep. Christopher Cox, R-Newport Beach, sent a separate letter to Thompson asking that the proposed rule changes be “carefully crafted.”
“My concern is that any change to the upper payment limit rule be accomplished in such manner that California’s safety-net hospitals can cope with it,” Cox wrote to Thompson. “A draft rule that has unofficially circulated did not meet this test: California’s safety net hospitals would go off the cliff, facing an immediate reduction of $300 million in federal Medicaid funds.”
In the letter, Cox said that while the higher payment limit only applies to public hospitals, “the structure of California’s Medicaid program intrinsically links public and private sector hospitals. It is for this reason that not only public hospitals, but also private safety net hospitals, children’s hospitals and teaching hospitals are deeply concerned about the potentially severe negative impact of an immediate reduction in the 150% upper payment limit for public hospitals.”
Meanwhile, officials at the federal Centers for Medicare and Medicaid Services, formerly the Health Care Financing Administration, have signaled that they intend to release the proposed rule, with the changes, this month.
Radiance Shifts Strategy
Radiance Medical Systems Inc., an Irvine-based device maker, is restructuring operations to conserve cash while gearing up to submit a pre-market approval application for its RDX radiation delivery system to the Food and Drug Administration. In a release, Radiance said that it had approximately $23 million in cash at the end of September.
Radiance also is seeking a corporate partnership to commercialize its RDX radiation delivery system in Europe, rather than scaling up sales distribution on that continent. The decision means Radiance won’t manufacture RDX products for sale in Europe or other countries.
Radiance continues to believe that its clinical study results will prove that the RDX “is a superior vascular brachytherapy technology,” said Jeff Thiel, president and chief executive. “However, European distribution of vascular brachytherapy devices requires significant sales and marketing resources. In light of the current competitive marketplace, we have decided to concentrate our resources and efforts toward U.S. approval and seek a partner for European commercialization.”
Separately, Radiance said the U.S. Patent Office issued an additional patent covering a number of methods and designs surrounding the RDX system. The new patent provides a method for the application of radioactive isotopes to the balloon materials.
Bits and Pieces:
PacifiCare Health Systems Inc., Santa Ana, said it achieved above-average scores in 18 of 20 quality-of-care measurements in the Health Plan Employer Data and Information Set report for fall 2001. The report is a standard set of performance indicators developed by the National Committee for Quality Assurance, a healthcare rating body based in Washington, D.C. Indicators include breast cancer screenings, diabetic eye exams and cholesterol screenings. PacifiCare also reported that InformationWeek magazine picked it as one of its top 100 information technology innovators in a survey published last month Universal Care, Long Beach, said its Orange County commercial health maintenance plan was awarded a commendable accreditation from National Committee for Quality Assurance. The committee awards its accreditation to health plans that meet or exceed its consumer protection and quality improvement standards Cardiac Science Inc., Irvine, said several hospitals recently installed its Powerheart bedside monitor defibrillators, including Anaheim Memorial Medical Center.
