Category: News

State Medicaid and other health programs have fallen under the axe or been moved onto the chopping block this week.

Associated Press: “Gov. Jay Nixon cut an additional $204 million from Missouri’s budget Wednesday and eliminated nearly 700 jobs in attempt to offset a continued decline in state tax revenues.” The cuts include lowering Medicaid payments (Lieb, 10/18).

Columbia Missourian: “Under Nixon’s plan, Medicaid programs face a loss of more than $32 million, mental health programs will lose $3 million, and MU Health Care-affiliated hospitals and clinics around the state will lose $3 million. … Nixon said services will not be drastically affected. Health care advocates, however, said there would be an impact on health care” (Beitsch, 10/29).

Associated Press: “Health care services for the needy may be sharply reduced if New Mexico Gov. Bill Richardson signs a budget-cutting measure approved by the Legislature, the administration said Tuesday.” The health department stands to lose about $38 million in state funding, as well as an additional $115 million in federal matching money (Massey, 10/28).

Associated Press: “Colorado Gov. Bill Ritter laid out his plan to cut another $286 million from the state budget on Wednesday, including reductions in Medicaid provider rates” (Paulson, 10/28).

Providence Journal: In an unrelated story, two nonprofit Rhode Island hospitals have gained approval to affiliate under a corporate parent. The new company would control 15 percent of the state’s hospital market. Officials said their main concerns where that the new hospital company continue providing care to Rhode Island patients, and that it preserve jobs (Salit, 10/29).

Las Vegas Sun: The Nevada health department has begun an investigation into an allegedly negligent nursing home. “All 139 elderly patients at an assisted-living and Alzheimer’s facility may have gone without their medications for weeks.” (Allen, 10/29).

Today, the Health IT Standards Committee within the Department of Health and Human Services will begin an unprecedented effort to get the public’s view on how our work might "pull forward" the benefits of healthcare information technology (IT).  Specifically, we’re interested in uncovering new strategies to accelerate the adoption of health IT standards.  This effort began with the passage of the American Recovery and Reinvestment Act of 2009, calling for recommendations on standards to promote safe, secure, healthcare information exchange.

“Standards” are really the guardians of quality, consistency, and interoperability.  Without thoughtful, clear and uniform standards, we cannot enable the seamless and secure exchange of electronic health information (or the benefits that accrue to providers and patients from such protected exchanges).

So, while the exploration of technical standards may seem mundane to some, it is foundational to electronic health records (EHRs) and electronic health information exchange more broadly.  In other words, it’s worth paying some attention to, and voicing your opinions.

Our process continues with a public hearing today in Washington, DC. Find out how to participate via phone and webcast here. We are convening four panels of experts with on-the-ground experience in interoperability standards – providers, quality stakeholders, health IT vendors, and a group with lessons drawn outside of healthcare. Thanks to HIT Standards Committee member Judy Murphy for her leadership on this effort.

The public hearing draws to a close this afternoon but we will continue the conversation through an Online Forum over the next two weeks.  Thanks to Committee Member Cris Ross for his leadership on this effort.  Given the breadth of interests, we have arranged a series of Committee Member blog posts to begin the dialogue, starting with HIT Standards Committee Vice-Chair John Halamka’s summary of our work to date, which will post on Friday.  We will concurrently enable ongoing discussion threads on the following topics:

Proposed Standards (General Discussion)
Interoperability
Vocabularies
Privacy
Security
Quality
Implementation Case Studies (Your Story – the good, bad and
in-between)

We have also enabled a "voting" feature on submissions to allow you – the public – an opportunity to emphasize points raised in a given post. Our goal is to harness the shared wisdom of our community to inform the work of the HIT Standards Committee in the weeks and months ahead.

The tight schedule of this process is designed to ensure that your ideas inform the HIT Standards Committee at its November 19th meeting.  However, your ongoing feedback on our efforts is also encouraged via written submission or public comment at any of the subsequent monthly meetings of the HIT Standards Committee.

The process of accelerating the adoption of health IT standards will not end this week, this month, or this year. This is an ongoing effort, and your participation will continue to be essential to its success.

Aneesh Chopra is U.S. Chief Technology Officer

Though the question of whether Democratic leaders would include a public option in the Senate’s health reform bill has held the spotlight, a variety of other big issues also remain unresolved, The Hill reports. For instance, “Sen. Charles Schumer (N.Y.), the third-ranking Democrat in the upper chamber, said Wednesday that insurance affordability, a controversial excise tax on high-cost insurance plans, whether most employers will be required to offer health benefits, how to raise needed tax dollars and whether to create a federal long-term-care insurance program are the remaining issues.” Concessions to liberals on the public plan and other issues have created a rift between the progressive and centrist wings of the party (Young, 10/29).

For instance, centrists oppose the long-term-care insurance program, originally proposed by Sen. Ted Kennedy, D-Mass., and favored by the more liberal House Democratic Caucus, CBS News reports. Seven centrist Democrats signed a letter asking Reid not include that provision in his final bill, because, they say, it will add to the deficit over time (Condon, 10/28).

Thirty senators sent Reid a letter asking him to include a public option, showing the greater weight liberals pull in his caucus, the Wall Street Journal reports. But, ultimately, Reid “needs the support of 60 senators twice — first in a vote to consider the health bill, then later to approve it. Even some Democrats who oppose the bill in its current shape may support the leader in the initial vote just to get it to the Senate floor. If so, it will kick off a weeks-long debate, including votes on numerous amendments and horse-trading to address the concerns of particular senators” (Bendavid, 10/29).

“As became apparent this week, Reid has secured promises from only most of his 60-member Democratic Conference to vote to begin debating the bill,” Roll Call reports. “But aides and Senators this week said Reid is charting the only path he can on health care reform given the rules of the chamber and the Members with whom he is working.” One reason for moving ahead without full support “is that it would be nearly impossible to corral all Democrats before the floor amendment process has even begun, considering many Members are inclined to withhold their support to try to influence the final bill” (Pierce and Drucker, 10/29).

Business leaders who thought they had dodged a bullet when the Senate Finance Committee decided against offering a government-run public option as part of their health bill are pushing back after the plan’s re-emergence.

The Wall Street Journal reports that several groups, including the Business Roundtable and the U.S. Chamber of Commerce began this week to lobby lawmakers to drop the option. President Obama will meet with small-business owners today to argue that the reform will allow them to control costs. “Large employers are concerned that the plan will end up raising their health-insurance costs. They believe that if the government pays doctors and hospitals at lower rates than do private insurance companies, the health industry would try to pass the cost on to those with private insurance.” Small businesses too are mostly against the plan, as is their group, the National Federation of Independent Business. Some small-business groups, though with decidedly less clout than the NFIB, are for the plan, including the Small Business Majority (Adamy, 10/29).

Politico reports that the U.S. Chamber of Commerce and several other business groups sent a letter to Senate Majority Leader Harry Reid and Senate Republican leader Mitch McConnell that said they support reform efforts, but not just any reform offering. “None of the points are particularly new. The letter mainly serves as a not so subtle reminder of what the business community wants from reform. The message: It’s getting late and unless we start seeing some progress, you won’t have our support” (Frates, 10/28).

Meanwhile, the GOP is urging business groups to speak their mind freely on the reform if they oppose it, The Hill reports. They are focusing on the NFIB and the Business Roundtable to take a more active approach. “Senate Republican leaders on Oct. 20 called representatives from the Business Roundtable, NFIB and other business groups to a meeting at the Capitol to find out what they planned to do during the upcoming Senate floor debate on healthcare reform, according to sources familiar with the session.” Senate Republicans are worried that deals between Democrats and the pharmaceutical industry (and one suspected with the American Hospital Association) may be harming efforts to criticize the reform bills (Bolton, 10/28).

Massachusetts Gov. Deval Patrick, a Democrat, and former Gov. Mitt Romney, a Republican, both say that federal health reform plans should do more to address rising costs than their state’s initiative. “Unlike the Massachusetts plan, which focused first on getting residents to sign up for insurance and only now is turning to cost containment, federal legislation must include measures to trim medical costs if it wants to garner and keep public support, Patrick said,” Bloomberg reports. “The 2006 Massachusetts law, with its combination of public and private insurance programs, has reduced the number of uninsured to 2.6 percent of its population, the lowest rate in the nation, according to the U.S. Census Bureau. At the same time, per capita health spending in Massachusetts is projected to double from 2009 through 2020, according to a June report by the state.” (Wechsler, 10/28) 

Meanwhile, Romney “is acknowledging that the health care plan he famously implemented as governor did nothing to address costs,” CNN reports. “We were unable to deal with — and didn’t have any pretense we would somehow be able to change — health care costs in Massachusetts,” said Romney. “We still have a fee for service, a re-imbursement system here like every other state in America. That’s the way Medicare and Medicaid are structured, that’s the way the insurance industry is structured,” he continued. Romney added that “‘Massachusetts is not the model’ for reducing health care costs” (Gupta, 10/28).

Halloween is coming up and if there’s one thing I know it’s that geeks love Halloween. The opportunity to hide behind a mask, to subvert the status quo, and to dress up like sexy nurse/sexy witch/sexy balloon boy is a cause for celebration. That said, we’re offering one Xbox 360 Modern Warfare 2 Limited Edition Console to the winner of our First Annual CrunchGear Halloween Costume Contest.

Here’s how to enter.

The Associated Press looks at what benefits medical homes may bring to health care by looking at one in Iowa: “A thousand miles from the health care debate in Washington, Dr. Don Klitgaard and his colleagues are carrying out their own reform in a small Iowa community.” Policymakers, including President Barack Obama, “have praised such experiments” as a way to achieve “better quality without costly complications. But change doesn’t come easy. In a traditional practice, the doctor is the center of universe. In the new model, he or she is part of a team. … Klitgaard is wondering if Congress will do enough for primary care doctors, the ones expected to carry out the transformation. Medicare, the government health program for seniors, doesn’t pay for the care coordination, monitoring, and coaching of patients that are part of his model” (Alonso-Zaldivar, 10/28).

Lawmakers target Medicare and Medicaid fraud to generate greater savings in health care reform while doctors worry about efforts to cut waste. The Wall Street Journal reports: “The federal government needs to further step up efforts to fight Medicare and Medicaid fraud to generate more savings to help pay for a health-care overhaul, lawmakers said Wednesday. … Health-overhaul legislation moving through Congress contains provisions to beef up the government’s antifraud effort. The U.S. loses at least $60 billion to health-care fraud every year, and some estimates put the cost as high as 10% of the nation’s total health-care spending, which exceeds $2 trillion.”

The Journal also adds, “Sen. John Cornyn (R., Texas) said government officials still need to figure out why Medicare and Medicaid have a higher rate of fraud than private insurers, especially since Congress is considering creating a public-insurance program. Bill Corr, deputy HHS secretary, said HHS and the Justice Department are making progress, especially by using specialized teams to ferret out fraud. But he agreed that the task is huge. Medicare alone, he testified, receives 4.4 million claims each day, which have to be paid between 14 and 30 days. The Medicare program, which spends more than $400 billion a year, reviews only 3% of those claims, he said. Medicare has reported that it improperly paid more than $10 billion in claims in the fiscal year that ended Sept. 30, 2008” (Zhang, 10/28).

The Associated Press reports: “The Obama administration is considering a way to bring together patients, doctors, insurers and law officers to combat fraud in Medicare and Medicaid, a Health and Human Services official said Wednesday. The summit, still under consideration, would enhance an increased effort to find and prosecute fraud in the programs, said William Corr, deputy HHS secretary. … The administration created a Justice Department-HHS team last May on preventing health care fraud. … The government is using new methods of data analysis and intelligence gathering to detect patterns of crime and the regions with the worst problems, he said” (10/28).

The Indianapolis Business Journal reports on doctors’ criticism of lawmakers’ efforts: “[S]ome doctors say the way the Senate Finance Committee bill tries to [cut waste] would be disastrous. The bill would require all physicians to participate in Medicare’s Physician Quality Reporting Initiative by 2012 and then, in 2014, use those reports to cut Medicare reimbursement by 5 percent for any doctor whose level of testing and procedures is in the top 10 percent of all doctors in his or her field. … They worry the government will not be able to collect the data needed to make sure the new law doesn’t punish doctors who do lots of tests and procedures because they see the sickest and poorest patients” (Wall, 10/28).

Meanwhile, the Houston Chronicle reports: “Seven people associated with a medical clinic have been indicted for alleged Medicaid and Medicare fraud and federal authorities seized millions of dollars in cash and property in Mississippi and Texas, court records said. Statewide Physical Medicine Group Inc. billed Medicare and Medicaid for more than $39 million in services in Mississippi during the alleged conspiracy, from 2000 to 2005, according to the indictment. The government agencies paid out $18 million. It’s not clear how much of that was obtained by allegedly fraudulent billing. The government has seized more than $3.6 million from various accounts” (Mohr, 10/28).

Bad news, you guys. If you were thinking of dropping $120 on TomTom’s iPhone car kit and then another $100 on TomTom’s navigation app for use with your first-generation iPhone or second-generation iPod touch, it now looks like you’d to run into some compatibility issues.

AppleInsider is reporting “that although the Car Kit dock is compatible with all iPhone models, the TomTom application will only work with the iPhone 3GS and iPhone 3G – even with the dock connected to a first-generation iPhone or iPod touch.”

You’ll recall that the hardware dock features its own built-in GPS chip and speaker to amplify GPS signal strength and the volume of turn-by-turn directions, so it appears that if you were to dock an iPod touch or older iPhone that you wouldn’t be able to take advantage of those enhancements. Basically, you’d have a $120 car charger.

AppleInsider further reports that “When asked whether the application could be updated to allow it to work with the iPod touch and first-generation iPhone, a company spokesman simply said that TomTom has not made any ‘public announcements.’”

It doesn’t seem like it would be rocket science to add the extra compatibility, and TomTom would theoretically benefit from the expanded hardware base of potential customers but, suffice to say, it’s best to hold off for now.

TomTom Car Kit, navigation software will not work with iPod touch [AppleInsider]

One news outlet studies the practical meaning of public insurance option by examining some of the approaches that are already in existence. Meanwhile, another examines the number of people who would have access to the public plan. And a former insurance executive takes issue with the industry’s current stance.

ProPublica: “About a third of Americans already get health care from a publicly administered program. From celebrated programs like the VA’s or the military’s, to the troubled ones like the Indian Health Services, here’s a snapshot of how they actually work.” ProPublica assesses TRICARE, the Veterans Health Administration, the Indian Health Service, Healthcare Group of Arizona, Medicare and Medicaid (Shankman, 10/28).

The San Francisco Chronicle reports that “lost amid the ideological battle for or against a public option is a key overlooked fact: The vast majority of Americans would have no access to a public option even under its most expansive versions.” That’s because “House and Senate bills limit the option to the smallest businesses and to individuals who cannot get insurance, or whose health care costs exceed 12.5 percent of their income. Even seven years into an overhaul, an estimated 90 percent of Americans, including nearly everyone who has employer-based coverage now, would be shut out of a public option” (Lochhead, 10/29). 

Meanwhile, Lois Quam, a former executive at UnitedHealth Group, is throwing her support behind the public option, The Star Tribune reports. At a speech at the University of Minnesota on Wednesday, Quam “took on the insurance industry head-on, noting that insurers had opposed (unsuccessfully) the creation of Medicare in the 1960s and opposed (successfully) health care reform during the early years of the Clinton administration. Now they’re doing it again, she said: ‘The insurance industry’s actions in the current health care reform debate have too often just been wrong. Their opposition to a public option, and the efforts to protect themselves, rather than Americans, are simply wrong’” (Yee, 10/28).

The proposed Microsoft-Yahoo deal seems to have hit a small and oddly unspecified bump.  The companies missed an October 27th deadline by which they hoped to have some details ironed out.

Yahoo admitted yesterday in an SEC filing, "The Letter Agreement specified that the parties would execute Definitive Agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized.  The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible."

The Microsoft-Yahoo partnership hasn’t been derailed, then, and considering all the time and energy everyone’s spent following these dealings, that’s a bit of a relief.  There’s just the question of why this delay has occurred.

Microsoft and Yahoo might be holding some quiet discussions with regulators in order to make sure they get things right on the first try.  Or maybe, considering that this is a ten-year deal, both sides’ lawyers have just gotten a little overwhelmed with paperwork.

Anything more serious would probably merit a mention in the SEC filing.

So hang in there and we’ll see what happens.  Yahoo did not establish a new target date, by the way.

Related Articles:

> Carl Icahn Quits Yahoo’s Board Of Directors

> Advertising Powerhouses Champion Microsoft-Yahoo Deal

> Justice Department Asks Microsoft, Yahoo For More Info

Data released today by the Commerce Department show that real GDP grew at an annual rate of 3.5 percent in the third quarter of the year.  This is in stark contrast to the decline of 6.4 percent annual rate just two quarters ago.  Indeed, the two-quarter swing in the rate of growth of 9.9 percentage points was the largest since 1980.  Analysis by both the Council of Economic Advisers and a wide range of private and public-sector forecasters indicates that the American Recovery and Reinvestment Act of 2009 contributed between 3 and 4 percentage points to real GDP growth in the third quarter.  This suggests that in the absence of the Recovery Act, real GDP would have risen little, if at all, this past quarter.

After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the U.S. economy is moving in the right direction.  However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered.  The turnaround in crucial labor market indicators, such as employment and the unemployment rate, typically occurs after the turnaround in GDP.  And it will take sustained, robust GDP growth to bring the unemployment rate down substantially.  Such a decline in unemployment is, of course, what we are all working to achieve.

Christina Romer is Chair of the Council of Economic Advisers

NEW YORK (Reuters) – The drawn-out sale of Bank of America’s (BAC.N) $1 billion wealth management business ultimately came down to how much protection against any unforeseen losses bidders demanded, rather than price.

The fact that asset quality was a key issue in the First Republic auction shows just how concerned many investors still are about the financial sector, where shares have rallied significantly since March, but where future loan performance is still an open question.

But the price that the two final bidders were willing to offer — around the net value on Bank of America’s books — also illustrates that conditions have improved since earlier this year, when investors would only have bought banks at a significant discount.

Other issues also came into play in the bidding, such as whether First Republic’s management would remain and certainty of closing a deal, a source familiar with the situation said.

A consortium of investors, including private equity firms General Atlantic and Colony Capital, ultimately beat out a bid from a rival team that included Blackstone Group (BX.N), Carlyle CYL.UL, TPG TPG.UL and financial services executive Gerald Ford. They paid about $1 billion for the bank, which reported $19 billion total assets, $16 billion deposits and $15 billion in wealth management assets for the end of September.

The consortium that didn’t win had done months of due diligence on the 24-year-old bank, which was seen as desirable because of the loyalty of its customers.

Of particular concern to that consortium was the likely performance of large mortgages, many of which were made in 2006 and 2007 when the housing market was already starting to deflate, a second source familiar with the situation said.

First Republic’s loan book is generally concentrated in California, New York, Connecticut and Massachusetts. The cheaper part of the housing market is showing some signs of stabilizing, but the outlook appears less rosy for pricer properties.

The members of the consortium that didn’t buy First Republic wanted a “stop-loss” or “loss-sharing” agreement to ensure that they wouldn’t take a big hit if loans on its balance sheet deteriorated significantly, the second source said. Under that, Bank of America would absorb losses on the assets after a certain point, that source said.

But the winning consortium, which has a long history with First Republic, had a better view of the loans and was less concerned about future asset deterioration, the first source said.

First Republic tends to offer relatively high rates on deposits, and demand low rates for mortgages it makes, meaning it has narrow profit margins, several people familiar with the process noted. On top of that, it offers a good deal of personalized service, which can be expensive.

With tight margins, loan losses can make the difference between turning a profit and posting losses.

Under the winning bidders’ deal, that consortium is entitled to “put back,” or sell back, some loans to Bank of America between now and closing in the second quarter of 2010, the first source said, but not after then.

Bank of America gained First Republic when it bought Merrill Lynch & Co. It put the business up for sale because it already has a wealth management business, U.S. Trust.

LARGE LOANS

First Republic, which then-independent Merrill Lynch bought just over two years ago for about $1.8 billion, tends to focus on professionals such as doctors and lawyers.

Some potential bidders, who dropped out earlier in the process, had hoped to use the bank as a platform to bring in ultra high net worth customers such as entrepreneurs, and offer them a wider array of financial products like hedge funds.

These prospective bidders thought that to take that step would require new management, separate sources familiar with the bidding process said.

First Republic’s founding management team — Jim Herbert and Katherine August-deWilde, who are part of the consortium buying the bank — plans to stay at its helm, and the winning group views them as crucial to First Republic’s success, the first source said.

The business as it is could be quite profitable, said Sebastian Dovey, managing partner at Scorpio Partnership, a wealth management consulting firm in London. Doctors and lawyers can expect solid income even amid market turmoil.

“These guys are important clients, and they’re growing their wealth,” Dovey said.

General Atlantic and Colony have a history with First Republic. General Atlantic was an early investor in First Republic in the 1980s. It had a representative on the bank’s board from 1987-1990. Colony’s founder Thomas Barrack has also been a board member of the bank.

The two private equity firms will be the largest of First Republic’s minority shareholders, with each holding less than 24.9 percent.

Colony, General Atlantic, TPG, Blackstone, Carlyle, and Bank of America all declined comment for this story.

The sources all declined to be named because details of the deal have not been made public.

By Megan Davies and Dan Wilchins
(Editing by Gary Hill)

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Black Opal Equity has launched as a Jersey City, N.J.-based private equity firm focused on U.S. middle-market businesses in the infrastructure, essential service and government sectors. Managing partner Matthew Day previously focused on infrastructure and essential services investments with Macquarie.

PRESS RELEASE

Black Opal Equity LLC launches today. Black Opal Equity is a unique, privately held investment firm that specializes in acquiring and actively managing established middle-market businesses in the United States.

Black Opal Equity will invest in companies that service, or partner with, the infrastructure, essential service and government sectors in the United States.

Black Opal Equity looks to acquire well-established companies with strong potential for organic growth, typically with annual EBITDA of between $2.5 million and $20 million.

Black Opal Equity is lead by Matthew Day, who has spent much of his career at The Macquarie Group, making private equity acquisitions in the infrastructure service and essential service sectors.

Black Opal Equity’s strategy is to make controlling investments in private companies and to assume an active, day-to-day operational role. As owner-operators Black Opal Equity is able to provide additional management resources as well as growth capital to help develop market-leading enterprises.

Black Opal Equity’s active participation strategy provides a unique liquidity opportunity for business owners looking to remove, or partially remove, themselves from day-to-day operations, as well as for larger businesses looking to divest of non-core divisions.

Black Opal Equity represents the capital and expertise of an accomplished group of institutional and individual investors, entrepreneurs and operators. The team has acquired and grown numerous profitable middle-market businesses, and understands the financial and operational issues faced by owners and managers of growth companies. Black Opal Equity’s active management strategy demonstrates its high level of commitment to driving its investments to success.

Mr. Stephen Clearman, Managing Partner and Founder of Kinderhook Partners, said: “We are strong believers in the value of the infrastructure service and essential service sectors. We look forward to working with Black Opal to unearth these opportunities and invest into sectors which provide the foundation of US enterprise.”

Matthew Day, Managing Partner of Black Opal Equity, said: “This venture provides a very unique access to infrastructure service and essential service investment opportunities — at a time when the future vision for the infrastructure backbone of America is experiencing a great deal of re-evaluation and re-investment from both the government and private sectors.”

About Black Opal Equity
Black Opal Equity is a unique, privately held investment firm that specializes in acquiring and actively managing established middle-market businesses in the United States. Black Opal Equity represents the capital and expertise of an accomplished group of institutional and individual investors, entrepreneurs and operators.

For more information visit http://www.blackopalequity.com

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A health care reform bill set to be unveiled this morning will include a government-run public option for health insurance that will negotiate rates with insurers, much like private insurers operate.

The Washington Post: House Speaker Nancy Pelosi will release a health-care reform bill today that includes a public option and “a historic expansion of Medicaid.” But legislative sticking points regarding abortion and immigration remain unresolved. “Senior Democratic House aides said the bill would likely include a version of the ‘public option’ preferred by moderates and may raise Medicaid eligibility levels to 150 percent of the federal poverty level for all adults, a steeper increase than in earlier drafts.” The bill will cost just under $900 billion over 10 years without increasing the deficit for at least 20, House Democrats said. A plan that would have tied the public option to Medicare rates lacked the votes needed to secure its passage (Murray, 10/29).

The Hill: “The negotiated rates plan is estimated to cost about $85 billion more than the Medicare-based reimbursements. … The Congressional Progressive Caucus vehemently pushed the Medicare-based public option, saying it was the best and cheapest way to expand coverage and lower costs. Most of its members support a full single-payer plan, and felt they’d compromised enough with the ‘robust’ option. Many centrist and rural Democrats say hospitals and physicians in their districts are already underpaid by Medicare” (Allen and Soraghan, 10/28).

The New York Times reports that the bill would cover an additional 35 million to 36 million people and includes a surtax on high-income earners — those making $1 million as a married couple or $500,000 on individuals, equal to three-tenths of one percent of all households (Pear, 10/28).

The Wall Street Journal reports that the plan to raise Medicaid eligibility for the poor could keep costs down because it would be cheaper for the government to insure them than to give subsidies to allow people to purchase private insurance themselves. “The Medicaid expansion is likely to prompt protests from the states, who share the program’s costs with the federal government” (Vaughan and Bendavid, 10/29).

The Los Angeles Times: “The House bill also will include a complex mechanism for limiting the use of taxpayer subsidies for abortion services: Insurance companies that offer abortion coverage would be required to segregate funds received from consumers from subsidies provided by the federal government” (Levey and Hook, 10/29).

CongressDaily reports that it’s not a sure thing that all Democrats will even support the bill. “Rural House Democrats could also revolt if a House agreement to address geographic disparities in Medicare rates is not included in the conference report. The agreement calls for an Institute of Medicine Study to report within 18 months on the geographical disparities in healthcare costs and quality” (Hunt and House, 10/29).

The Associated Press reports that the bill would require everyone to sign up by 2013 for insurance through their employer, a government program or a purchasing pool called an exchange. No Republicans are expected to vote for the legislation. “One change expected to be revealed Thursday is that some of the benefits in the bill, which mostly were set to take effect in 2013, have been moved up so that Americans would see the benefits of the legislation more quickly, according to Pelosi spokesman Nadeam Elshami” (Werner, 10/29).

In the meantime, Pelosi is moving to secure votes and playing hardball, even with members of her own caucus, Politico reports. “Pelosi can lose at least 38 Democrats on the bill she’s introducing Thursday and still tally a win. But the ‘no’ votes are already stacking up — a mix of freshmen in GOP-leaning seats, fiscal conservatives and even more senior members skittish about an anti-Democratic wave come 2010” (O’Connor, 10/29).

Politico has a second story about how most liberals can live with — for now — the compromises Pelosi is suggesting because the Senate side has a public option in their bill also. “In the end, liberal Democrats felt Pelosi and her leadership team did everything possible to push for the strongest possible public plan, both because the speaker favors it — especially since it saved about $85 billion more from the final cost of the bill — and because it would bolster her hand in negotiations with the Senate” (O’Connor, 10/29).

But Roll Call reports that the plan has liberals waving the white flag of surrender. “Rep. Lynn Woolsey (D-Calif.), co-chairwoman of the Congressional Progressive Caucus, cautioned that her group has made no decisions about whether to support the more moderate approach pending a look at legislative language. But she echoed many others in her ranks when she signaled liberals are ready to claim victory on dragging the plan back from the dead and accept a compromise” (Newmyer and Dennis, 10/29).

Finally, The Hill reports in a second story that a widely-reported whip count was wrong that said the so-called “robust” public option that tied rates to Medicare lacked the votes to pass in the House. House Majority Whip James Clyburn, D-S.C., said Wednesday: “Sources indicated that the numbers on the list are accurate or close to accurate, but that some lawmakers’ positions are listed incorrectly” (Soraghan, 10/28).

ComVest Group has been completed its $81 million acquisition of Cynergy Data LLC, a payments processor that filed for Chapter 11 bankruptcy protection earlier this fall.

PRESS RELEASE

Cynergy Data and The Comvest Group announced today that Cynergy Holdings, LLC, an investment vehicle that is managed by The Comvest Group, has completed the acquisition of substantially all of Cynergy Data’s assets for $81 million.

In conjunction with Cynergy Data’s September 1, 2009 bankruptcy filing, the company sought approval from the United States Bankruptcy Court for the District of Delaware of its transaction with The Comvest Group as “stalking horse bidder.” Following an extensive marketing and sale process, The Comvest Group emerged as the victorious bidder. The bankruptcy court then approved the sale on October 9, 2009, paving the way for the transaction to close. The closing culminates Cynergy Data’s expedited bankruptcy sale process, which was completed in less than two months.

The Comvest Group is a private investment firm focused on providing debt and equity solutions to middle market companies. It is a leading provider of capital to the financial technology markets and owns controlling interests in a number of companies in the electronic payment processing industry, including Pipeline Data, CardAccept, AirCharge, SecurePay and Northern Merchant Services.

The sale enables the core operations of Cynergy Data, a merchant credit card processing service provider, to emerge quickly from bankruptcy as a new company positioned for growth, with a well-capitalized partner, a substantially lower cost structure, and a much stronger balance sheet. The Comvest Group is investing $35 million into the business.

The Comvest Group has indicated its support for Cynergy Data’s management team, its employees and its business plan. “I am very excited about this business and its opportunities in the future. I look forward to working with Marcelo Paladini, whose leadership and vision have helped make Cynergy a leader in our industry, and the entire Cynergy team to build upon the company’s reputation for excellence. Just as Marcelo was the driving force behind creating a successful and dynamic business in the first place, going forward he will play an integral role in strengthening existing business relationships, continuing to build the Cynergy Data brand in the marketplace and shaping the strategic direction of the company. His leadership will remain a key component of our success and we will be working closely together,” said Randal McCoy, chief executive officer for the new company and operating partner with The Comvest Group.

According to Cynergy Data founder Marcelo Paladini, who has assumed the role of vicechairman and executive vice president of business development, “The approval by the bankruptcy court and subsequent closing of our sale to The Comvest Group are critical components of our restructuring strategy. The speed and skill with which this transaction was executed is a testament to the hard work and professionalism of our management, employees, attorneys, financial professionals, investment bankers and other advisers. The entire Cynergy Data team is now focused on continuing to provide world-class products and services to our merchants and ISO partners. I’m very excited about what the future holds for our organization.”

About Cynergy Data

Launched in 1995, Cynergy Data is a merchant credit card processing service provider that gives business owners excellent customer support and unparalleled merchant services. The company emphasizes honest, service-oriented business practices and customer-friendly products and services. During the past 14 years, Cynergy Data has rapidly expanded from a two-person operation to one that employs over 130 service-oriented team members. Headquartered in New York City, Cynergy Data manages a portfolio of nearly 80,000 merchants processing in excess of $10 billion annually.

About The Comvest Group

The Comvest Group is a leading private investment firm focused on providing debt and equity solutions to middle-market companies with enterprise values of less than $350 million. Since 1988 Comvest has invested more than $2 billion of capital in over 200 public and private companies worldwide. Through its extensive financial resources and broad network of industry experts, Comvest offers its portfolio companies total financial sponsorship, critical strategic support, and business development assistance. Comvest additionally owns controlling interest in Pipeline Data, CardAccept, AirCharge, SecurePay and Northern Merchant Services; all credit card merchant servicing organizations.

About the Restructuring

On September 1, 2009, Cynergy Data, its parent corporation and a wholly owned subsidiary filed voluntary petitions for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware is presiding over Cynergy Data’s chapter 11 proceedings. Copies of court documents are available at http://www.kccllc.net/cynergydata.

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Virdante Pharmaceuticals, a Cambridge, Mass.-based developer of technology to increase the anti-inflammatory potency of plasma-derived intravenous immune globulin, has expanded its Series A funding to $47.75 million. Thomas, McNerney & Partners led the new tranche, and was joined by Osage Partners and return backers Clarus Ventures, Venrock, MedImmune Ventures and Biogen Idec New Ventures.

PRESS RELEASE

Virdante Pharmaceuticals today announced its debut with the closing of a new financing, management additions and expansion of internal product development programs. Virdante Pharmaceuticals was initially funded in 2008 to develop safer and more effective biopharmaceuticals based on the pioneering research by Jeffrey Ravetch, M.D., Ph.D., of The Rockefeller University. Virdante is incorporating Dr. Ravetch’s “Sialic Switch” technology to improve the anti-inflammatory activity of antibody-based drugs to treat autoimmune and inflammatory disorders.

$47.75 Million Series A Financing

Virdante extended its Series A financing, with the recent expansion led by Thomas, McNerney & Partners with participation by Osage Partners and previous investors: Clarus Ventures, Venrock, MedImmune Ventures and Biogen Idec New Ventures. The new funds bring the Series A total since January 2008 up to $47.75 million.

“Virdante’s Sialic Switch technology represents a breakthrough in the understanding and modulation of the inflammatory response that can be applied to human antibody therapeutics, which make up a significant and growing share of the global pharmaceutical market,” commented Eric Aguiar, M.D., Partner at Thomas, McNerney & Partners. “Dr. Ravetch’s work suggests that this technology could have a significant impact on the $4 billion market for plasma-derived IVIG products. We believe the Sialic Switch technology also has the potential to improve antibodies that exploit other anti-inflammatory pathways for a variety of autoimmune and inflammatory diseases.”

Additions to Management and Board of Directors

Over the last year, Virdante has attracted a leadership team with a track record of success in the biotechnology industry. Recent additions include: L. Patrick Gage, Ph.D., Executive Chairman of the Board; Cristina Csimma, PharmD, Vice President of Drug Development; and Rajeev Chillakuru, Vice President of Pharmaceutical Sciences. Eric Aguiar, M.D., Partner at Thomas, McNerney & Partners also joined the Virdante Board of Directors.

Virdante’s other Board members include: Anders Hove, M.D., Partner at Venrock; John Ripple, Chief Executive Officer; Michael Steinmetz, Ph.D., Managing Director at Clarus Ventures; and Gail Wasserman, Ph.D., Senior Vice President, Development, MedImmune.

“The leadership team at Virdante is committed to rapidly achieving human proof of concept for the broad applications of our Sialic Switch technology by advancing our lead sIVIG development candidate into the clinic,” stated John Ripple. “Our business model is to develop and commercialize a proprietary pipeline of biopharmaceuticals and to apply our technology to development candidates from a select group of corporate partners.”

Virdante’s sIVIG and sFc Development Programs

Virdante’s lead program, sIVIG, applies Sialic Switch technology to increase the anti-inflammatory potency of plasma-derived intravenous immune globulin (“IVIG”). This novel approach reduces the time to administer a therapeutic dose from days to hours. IVIG is used to treat inflammatory and autoimmune disorders, representing over $4 billion in worldwide revenues in 2008.

Virdante also announced today that the Company plans to use the proceeds from the new financing to pursue development of a second drug, a sialylated recombinant IgG Fc fragment (“sFc”), the segment of IgG responsible for the anti-inflammatory activity of IVIG. In addition, Virdante plans to expand the application of its Sialic Switch technology to improve the potency of important anti-inflammatory antibodies such as anti-TNF drugs.

About Sialic Switch Technology

Virdante’s proprietary Sialic Switch technology increases the anti-inflammatory activity of antibody-based drugs by enhancing signaling via a novel pathway. Dr. Jeffrey Ravetch, the Company’s founder and professor at The Rockefeller University and a member of both the National Academy of Sciences and the Institute of Medicine, discovered this novel anti-inflammatory pathway activated by specifically sialylated Fc-linked glycans of IgG antibodies. This discovery was based on the observation that only a minor fraction of the pooled IgG molecules in IVIG is responsible for the therapeutic anti-inflammatory properties of the drug due to specific sialic acid linkages on their Fc-linked glycans. Virdante has exclusively licensed the Sialic Switch technology from The Rockefeller University and established a strategic research alliance with Dr. Ravetch’s laboratory to continue to explore this novel anti-inflammatory pathway. Dr. Ravetch has further shown that these anti-inflammatory properties can be reproduced with a fully recombinant preparation of appropriately sialylated IgG Fc fragments (sFc), providing a more efficacious and potent treatment at lower dose levels. Virdante is using enzymatic methods to apply the Sialic Switch technology to antibody-based therapeutics. References on the Sialic Switch technology can be found on Virdante’s website, www.virdante.com.

About Virdante

Virdante Pharmaceuticals is developing safer and more effective drugs for autoimmune and inflammatory diseases. Our products incorporate a proprietary “Sialic Switch” technology to improve the anti-inflammatory properties of antibodies. Virdante’s investors include: Clarus Ventures; Venrock; Thomas, McNerney & Partners; MedImmune Ventures; Biogen Idec New Ventures; and Osage Partners. Virdante is located in Cambridge, MA. www.virdante.com

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Smarterville Inc., a provider of supplemental educational content like Hooked on Phonics, has acquired selected operating and brand assets of Educational Resources Inc. and Sunburst Technology Corp. No financial terms were disclosed. Smarterville is a portfolio company of Sterling Partners.

PRESS RELEASE

A subsidiary of Smarterville, Inc., Smarterville Educational, LLC, has acquired selected operating and brand assets of Educational Resources Inc. and Sunburst Technology Corporation.

“This asset purchase fits strategically with Smarterville’s corporate vision of being the leader in branded, supplemental educational content and solutions,” said Judy L, Harris, CEO of Smarterville, Inc. “The Sunburst brand has a long-standing reputation with schools for producing high quality software and other supplemental tools and Educational Resources is an established, trusted resource for schools wanting to leverage technology in the classroom.”

Smarterville, Inc. is a leading provider of branded, supplemental educational content and solutions. Serving both the consumer and educational markets with respected product brands such as Hooked on Phonics® and Sunburst Technology®, Smarterville empowers parents and teachers to help children succeed. For more information, please visit www.smarterville.com, www.hookedonphonics.com or www.sunburst.com

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