State news: S.C. hospital to pay $17M settlement, new single-payer proposal in N.J.

Here’s a roundup of healthcare news from around the country, including the relaunch of CHIP in Arizona and 400 Massachusetts doctors switching to a rival network.

South Carolina’s Lexington Medical Center to pay $17M over referral, overpayment allegations

The U.S. Department of Justice (DOJ) announced July 28 that Lexington Medical Center in West Columbia, South Carolina, has agreed to a $17 million settlement over alleged violations of the Stark Law and the False Claims Act.

The DOJ said the hospital’s asset purchase agreements, as well as 28 employment contracts with physicians, violated the Stark law by overypaying when “they took into account the volume or value of physician referrals.”

Lexington Medical will have to pay the settlement and abide a new integrity agreement with HHS to prevent similar conduct from reoccurring. $4.5 million of the settlement will go to the physician who filed the whistleblower lawsuit, David Hammett, MD.

N.J. legislator introduces single-payer plan

Democratic New Jersey Assemblyman Reed Gusciora is proposed a single-payer health insurance plan to cover low-income residents in the state who are already eligible for federal subsidies.

New Jersey 101.5 reported the plan was inspired by the “Medicare for all” proposal championed by presidential candidate U.S. Sen. Bernie Sanders. Gusicora’s proposal would require the state to insure residents who are eligible for subsidized coverage the Affordable Care Act’s exchanges, arguing the state would be able to negotiate better costs to the more than 250,000 people already receiving tax credits (plus eligible enrollees who remain uninsured).

“Cut out the middle man. We now go through insurance companies, but people complain that health care costs still increase and that there’s no real competition,” Gusciora said. “It would be the ultimate Medicare expansion, but more universally. There’s not age restriction.”

Gusciora said the plan wouldn’t change coverage for those under Medicaid, Medicare or private plans.  

CMS approves plan to end 6-year CHIP freeze in Arizona

Arizona is accepting new applicants in its Children’s Health Insurance Program (CHIP), called KidsCare, ending a six-year enrollment freeze blamed on state budget troubles.

CMS said the state began taking new applications on July 26 for children 18 and under with income between 133 and 200 percent of the federal poverty level, with access to services beginning Sept. 1. The state expects 30,000 to 40,000 children to become eligible.

The program had been frozen just before the Affordable Care Act prohibited states from reducing children’s health coverage. The state won’t be paying to rejoin CHIP, with the federal government picking up the cost through at least 2017.

400 Boston-area physicians switching from Partners to Tufts

Nearly 400 physicians in the Medford, Massachusetts-based Hallmark Health System will leave Partners Health Care, the state’s largest health system, and join a rival network affiliated with Tufts Medical Center.

The Boston Globe reported the move was motivated by a June announcement that Tufts’ parent company would merge with Hallmark. Tufts spokeswoman Alison Nogi said the switch was “a natural alignment that will serve to strengthen and expand the excellent work we do in supporting our physicians and serving our communities.”

The new network and health system would still be much smaller than Partners, which runs 10 hospitals with more than 6,000 physicians.