Healthcare Roundup: Anthem Blue Cross Sued, Hospitals Slow Expansions, GM Cuts Healthcare, and More

(MoneyWatch)  Anthem Blue Cross sued for rescission-settlement efforts -- Los Angeles City Attorney Rocky Delgadillo sued the health-insurance company, a unit of WellPoint, charging that it illegally sought to reach settlements with policyholders by offering them $1,000 in exchange for dropping all legal claims. Anthem and several other health plans recently settled state accusations that they had systematically and retroactively canceled the coverage of sick members who started to run up big medical bills. [Source: Modern Healthcare]

Credit crunch slows hospital expansion plans -- The NYT weighs in on the question of how hospital systems are faring amid the financial crisis, finding mostly that the general freeze in borrowing has forced some hospitals to slow or scale back their expansion plans. Some also fear that economic problems may also boost hospitals' bad-debt levels. [Source: NYT]

Doctors treat uninsured patients differently -- Doctors commonly adjust their treatment plans based on the coverage status of individual patients, often skipping expensive tests or scheduling surgeries when they are less likely to "bump" appointments with better-insured individuals. Patients with no insurance typically have lower survival rates when they fall ill with major diseases. [Source: WaPo]

One in six online health-insurance buyers are "uninsurable" -- A survey by Norvax, an online health-insurance service, found that 15 percent of people searching for individual coverage online couldn't qualify for insurance due to preexisting conditions or morbid obesity. Two-thirds of these uninsurable individuals were women. The issue is a big one because John McCain has proposed healthcare reform that would have the effect of pushing more people into the individual-insurance market. [Source: WSJ Health Blog]

Nonprofit hospitals relocate to suburbs, snubbing urban patients -- In addition to other efforts to favor wealthier, better-insured patients, some nonprofit hospitals are closing money-losing facilities in urban centers while building or renovating outposts in better-off suburban locations. Nonprofits have recently closed hospitals in LA, Chicago, Newark, N.J., and Detroit while spending billions on shiny new suburban medical centers. [Source: WSJ Health Blog]

California to investigate registered-nurse criminal backgrounds -- Authorities launched a major probe of registered nurses in the state after the LA Times found that dozens of nurses retained their licenses despite multiple criminal convictions. Among other things, nurses licensed prior to 1990 will have to be fingerprinted. [Source: LA Times]

GM cuts healthcare coverage for 100,000 retirees -- The struggling automaker announced last week that it will end health-insurance coverage of more than 100,000 retirees and their dependents. Instead, GM will add $300 a month to existing pension checks to defray the cost of coverage, although that sum isn't likely to go very far in the individual-insurance market. [Source: Detroit Free Press via kaisernetwork.org]

Illinois court nixes state plan for extended healthcare coverage -- Illinois officials were set back in an effort to expand coverage for low-income individuals. An appeals court ruled that the state had exceeded its authority when it expanded Medicaid eligibility and sought to shift people from a state program called FamilyCare to the federal program. [Source: American Medical News]

Lehman failure forces Boston Scientific founders to dump stock -- The big medical-device maker said last week that founders Pete Nicholas and John Abele had to dump 13 million shares in the company on Oct. 8. The two men and a related trust were unable to raise short-term cash to cover collateralized loans, thanks in part to the failure of Lehman Brothers. The company said the sales were involuntary and don't reflect on Boston Scientific's prospects. [Source: Boston Scientific, WSJ Health Blog]