REPORT: MEDAMERICA UNDER INVESTIGATION

A trade publication reports that the U.S. Department of Justice and Missouri attorney general's office are investigating potential antitrust violations by MedAmerica HealthNet.

The report, which was dropped off anonymously at sites around the city, had health-care experts buzzing Wednesday.

A spokeswoman for the Justice Department would neither confirm nor deny the investigation, which was reported in this month's edition of Modern Healthcare.

Scott Holste, a spokesman for the attorney general's office, said he was unable to confirm the reported investigation because he couldn't reach investigators Wednesday, a state holiday, Truman Day.

The article quotes assistant attorney general Gary Kraus as saying investigators have just started the probe and are unsure which laws may have been violated. Kraus is quoted as saying investigators are "in fact-finding."

MedAmerica HealthNet, marketed in cooperation with Blue Cross Blue Shield of Missouri as HealthNet Blue, is a physician hospital organization (PHO) comprised of five area hospitals and their medical staffs.

Mary Dunn, executive director of SEMO Business Group on Health and a proponent of managed care, said she had been contacted by state and federal investigators. Dunn said she was apparently one of many people contacted.

"I understand that I was called based on complaints from inside and outside the community" regarding MedAmerica HealthNet, said Dunn. "It's obviously very serious or they wouldn't be here."

Dunn said she couldn't speak to the substance of the investigation, but "I think some of the issues are probably regarding the lack of managed care in this area."

Employers in the area have no options for managed-care providers, she said.

Humana Health Care Plus last year designated Southeast Missouri Hospital as its provider for the region after it was unable to contract with either of the two Cape Girardeau hospitals for services.

In response, St. Francis Medical Center began offering discounted services to families covered by Humana.

Dunn called the incident with Humana a prime example of the lack of managed-care options in the area.

"Humana is just the first company that had the guts to come in here," she said. "But I know that other insurance companies have been trying."

Jeff Andersen, Humana's vice president of operations, said his company's inability to contract with a hospital is "evidence of the fact that there have been antitrust violations within the PHO."

"That's been part of their strategy, really, to prevent managed-care entities from offering managed-care products in the city," Andersen said.

"I've been told by hospital administrators in this town that they are not going to sign managed-care contracts," he said.

Wade C. Adams, the executive director, said he hasn't been contacted by any investigators and didn't know about the apparent probe until he got a copy of the article.

"I guess you got an anonymous envelope, too," he told a reporter who contacted him for comment.

"We have no information on what's going on, what the nature and scope of the investigation is," he said.

Adams denied that MedAmerica HealthNet has prevented managed care from coming into the community. "It's actually helped facilitate managed care coming into the community," he said.

MedAmerica HealthNet covers 23,000 people. "If you look at those numbers, that must mean we're doing something right," Adams said.

James Wente, administrator of Southeast Missouri Hospital and a member of MedAmerica HealthNet's board of directors, also said he had gotten a copy of the article but he had not been contacted by investigators.

"I'm just not in a position to speculate" on the scope of the apparent investigation, Wente said.

He would not comment on the nature of the market for managed health care.

Dr. William Shell, a Sikeston physician and president of MedAmerica HealthNet's board, said he had also seen the article. He referred questions to the network's attorney, Rob McCann, who could not be reached Wednesday.