Healthcare Roundup: Possible Health Net Probe, Another Chicago Hospital Closes, ICD-10 Costs Criticized, and More

(MoneyWatch)  Congress calls for investigation of Health Net -- The Woodland, Calif.-based health-insurance company is in the sights of Congress, especially John Dingell, chairman of the House Energy and Commerce Committee. Dingell accuses Health Net of using misleading robocalls to pressure seniors into enrolling for particular Medicare Advantage plans. [Source: Modern Healthcare]

Chicago hospital closes down -- Chicago's Lincoln Park Hospital, owned by the private-equity backed Merit Health Systems, failed to find a buyer and will close down as soon as it can transfer or discharge its remaining 37 patients. The 125-year-old hospital, whose patient base include a large number of Medicaid recipients, couldn't raise the $7 million to $9 million required thanks to shrinking access to capital, its CEO said. [Sources: Chicago Tribune, Chicago Tribune, WSJ Health Blog]

ICD-10 critics put figures on changeover cost -- A coalition of groups opposed to the federal government's plan for 2011 implementation of new billing and diagnosis codes cited a new report to support claims that the speedy plan will cost too much. The study, by Nachimson Advisors, says a 10 doctor practice would spend $285,000 to implement the new codes, known as ICD-10, while a three doctor office would pay $83,290 and a 100 doctor outfit would pay more than $2.7 million. [Source: Health Data Management, Nachimson Advisors]

California balance-billing rules enacted, challenged -- The state's new regulations, which are designed to prevent hospitals from billing insured patients directly whenever their health-insurance providers don't pay their emergency-room bills, went into effect yesterday, and were just as promptly challenged in court. The California Medical Association and the California Hospital Association argued in court filings that the state lacked the authority to ban the practice, known as balance billing. [Source: Modern Healthcare]

Congress to standardize "community benefit" for nonprofit hospitals -- In response to recent Government Accountability Office report, Sen. Chuck Grassley -- ranking member of the Finance Committee -- said nonprofit hospitals had too much leeway in defining the "community benefits" they provide to their locales. Nonprofits' lucrative tax exemptions require hospitals to give back to their community, but some currently include payments such as employee salaries as "community benefit.?" Grassley will seek a "bright line" test for the IRS to use in judging whether hospitals are living up to their obligations. [Source: kaisernetwork.org]

Pennsylvania healthcare-data organization PHC4 doomed? -- A small but apparently influential healthcare quality outfit known as the Pennsylvania Healthcare Cost Containment Council is threatened with expiration by Nov. 30 unless two state sentators succeed in a bid to save it. [Source: FierceHealthcare]