Hartford Courant from Hartford, Connecticut • Page 38

D2 THE HARTFORD COURANT Thursday, March 4, 1999 Top Court Backs Insurers On Health Care Issue PAGE By GREG STOHR Bloomberg News WASHINGTON Insurers aren't barred by the U.S. Constitution from demanding review by an independent committee before they pay for treatments they consider unnecessary, the Supreme Court ruled. The high court upheld Pennsylvania rules that insurers and employers say have saved them tens of millions of dollars in that state alone by letting them force "utilization review" before they pay some claims. The justices rejected a challenge by a group of workers who said the system violated their constitutional rights. The ruling is an important victory for insurance companies such as CNA Financial CIGNA the Hartford Financial Services Group and which defended the Pennsylvania rules before the high court The decision likely will insulate similar programs that other states have put into place.

The justices reversed a decision by the 3rd U.S. Circuit Court of Appeals, which had said insurers must pay the claims until the workers have a chance to submit a statement challenging an insurer's decision. All nine justices voted to reverse the 3rd Circuit decision, although they disagreed on the legal reasoning. Insurance companies said the lower court ruling undermined their ability to cut health care costs. They say they face frequent disputes with workers' compensation In the interim, the insurer can withhold the payment.

If the utilization review organization, known as the URO, eventually concludes the treatment is necessary, the company must pay the bill immediately with interest Since 1993, insurers in the state have filed for such review 50,000 times, with two-thirds of the cases resulting in at least a partial denial of benefits. In a class-action lawsuit, beneficiaries said that process doesn't protect their interests adequately. The insurance companies argued before the high court that they shouldn't be put on the same legal footing as a government entity that gives out welfare, Medicaid or other public benefits. beneficiaries, particularly over the' need for repeated treatment by non-physicians, such as chiropractors, psychologists and physical therapists. Insurers argue they have no effective means to recover those payments from health care providers after they've been made.

At issue was the "utilization review" procedure for medical services under Pennsylvania's workers' compensation program, a system funded by insurance companies and self-insured employers. Under the state's rules, if an insurer questions a treatment sought by a beneficiary, it can ask an independent physician or other medical authority designated by the state to assess the need and the reasonableness of the charge. QUOTE OF THE DAY "It's the coolest place Vve ever seen. My feeling is that they give people with ideas chances to play with them." LAURA KENT, director of the Connecticut Technology Council, on Sonalysts high-tech mixture of precision and creativity. CONNECTICUT STOCK SCOPE Shares Of ATMI Drop, Lead State Index Lower YTD YTD Name PE Last ChgChg Name Div PE Last ChgChg AcmatCorpA Advest ADVO Inc Aetna Inc Ahold Allegheny Corp Alliance Bancorp AlliedSignal American Bank CT Ames Dept.

Stores 15'A 0.0 191516 -Via 7.8 118 -s 777ie 187V8 -Vs 10V2 4218 V2 21 14 2212 -V16 12.5 337e -Vie 15Ve -Vs .8 40916 7i6 4.2 I8V2 78V2 -1V2 1.5 23 Vie Ve 15-7ie 16 80,116 36 14.2 57 -1V8 16.5 18-Mt28 .7.7 21732 V32 12Vi6 26V4 -'4 25 16 316 38Vi6 -V16 2PM 47 134 1.6 34 V2 516 15.0 6878 56 434 -Vs 45V4 -1116 10.4 7018-'5i6 27.6 21Vi6 Analysis Technology 20 Aquarion 13 Bancorp CT 13 BankBoston 15 Barnes Group 11 CIGNA Corp 13 CTG Resources Inc 16 CUNOInc 45 Cendant cc Chase Manhattan 21 CitiGp 24 Coltec Ind 10 Command Systems dd Commercial Inter. 7 Connecticut Energy 14 Connecticut Water 17 Conning 17 DanaCp 10 Dexter Corp 20 Diageo Disney 42 Eaton Corp 14 EDAC Technologies 9 Ethan Allen 17 Executive Risk 19 Executone Info Sys dd Farmstead Tele. dd 13 First Intl Bancorp 12 First Union Corp 18 Fleet Financial 17 GTE 24 General Cigar Hold 8 General Dynamics 21 General Electric 35 Gerber Scientific 35 1 1316 24i6 10Va 5236 43 61 9i6 V16 -36 17.4 -V2 1 7V2 V16 59 316 14 13.7 .3 98 -916 19V8 316 19.7 concern that corporate earnings don't justify the lofty level of share prices. "The market is coming down for a variety of reasons: overvaluations and higher interest rates," said Stanley Nabi, chief investment officer at DLJ Investment Management which oversees $19 billion. "In the kind of economic environment we have now, earnings growth should be explosive.

It isn't." Shares of Hartford Financial Services Group one of the largest U.S. insurers, and Technologies a Windsor-based maker of financial software, also felL Hartford Financial fell $1.81, to $54.31. fell to $16. Nationally, the NYSE composite index fell 0.39, to 582.55, and the American Stock Exchange composite index fell 4.76, to 694.45. The Russell 2000 index of smaller companies fell 2.48, to 391.95.

An Associated Press report is included in this story. Company close Andersen Group 3.37'j Loss 18.18 11.98 10.49 6.25 6.25 5.75 5.26 5.15 5.06 5.00 ATMI I Crmptn. Kftwls. Alexion 18.37y2 16.00 16.87'j 11.25 Startechre" Farrel Lone Star Vion Tridex .31.06 4.69 2.37'2 Bloomberg News the global work force of Otis Elevator in Farmington to customize the company's intranet, said Matthew Broder, senior manager of international communications for Otis. "They were a delight to work with, very unbureaucratic, very focused on problems and very creative," Broder said.

"They never said no. They didn't always say yes, but they tried to address all our concerns." Sonalysts officials concede that the collapse in defense spending following the end of the Cold War flattened company earnings for a few years in the early 1990s. But they also noted that, as the military cut back on personnel or material, the services had to depend more on simulated training excercises, a Sonalysts specialty. Sonalysts does not make a distinction between government contracts and private sector work because the two markets are so intertwined, Goldsmith said The story of the 688i Hunter Killer software game developed by Sonalysts illustrates the point The submarine gaming software, built upon former naval officers' intimate knowledge of Cold War undersea tactics, sold more than 200,000 copies to sophisticated military-game players. The game was so realistic, Goldsmith said that the British navy uses it to train its own submarine officers.

Sonalysts' experience in producing military training films also spawned many interrelated business ventures. Animators at have worked on commercials for companies such as Southern New England Telecommunications, and work on projects generated by Sonalysts marketers, who have helped design everything from building decorations to logos, buses, and even poker chips and matchbooks at casinos such as the Mohegan Sun. The expertise in acoustics developed in sonar work led to the building of sound studios used by recording artists such as Blondie and Bon Jovi. And Sonalysts audio technology helped the undersea thriller "The Hunt for Red October" win an Oscar for sound effects in 1991. The company's movie studio hosted Spielberg's crew in 1997 when it filmed part of the movie "Amistad" in Connecticut The desire for high-tech effects has infected the military, which for decades has been the butt of service jokes because of the poor quality of its training films.

"I had one official tell me he wanted the training video to be more Spielbergesque, with big music and big animation," Toriello said. "It's come full circle." By SCOn GOODWIN Bloomberg News Connecticut stocks fell Wednesday, led by ATM as concern that demand for personal computers is slowing continued to drag down the shares of companies that make equipment to produce computer chips. The Bloomberg Connecticut Index fell 1.98, to 191.05. The index, down 4.9 percent this year, is a price-weighted list of the stocks of 157 companies that do business in Connecticut, and is designed to reflect the performance of the state's economy. ATMI, a Danbury-based maker of thin film materials that semiconductor manufacturers use, fell $2.50, to One week ago, ATMI closed at $26.75.

The stock has since dropped on concern that a recovery among equipment suppliers to chip-making companies will be muted by slower PC sales. The broader equity market fell on Company Close Gain Cyberian Outpost 22.50 39.53 Bio-Plexus 2.37'2 11.76 TransAct 2,81 9.76 NMBT 16.75. 7.20 Acme United 2.12 6.25 Ames 30.37'2 5.88 Wyman-Gordon 9.06 5.07 TransPro 5.69 4.60 Nordstrom 42.06 4.34 Hyperion 4.00. Stocks trading for $2 or more $20 15 10 5 52-Week Performance High: $48.00 on 072098 Avg: $29,889 Low $12.44 on 100898 SOURCE: Bloomberg News March 3,1998 SNAPSHOT Sonalysts Continued from Page D1 Rovera concluded, as Toriello started to move the group on to visit the company's animation division. So just how did a defense contractor, which still conducts top-secret projects for the military, land such a high-profile and diverse group of services and clients as Bon Jovi, Spielberg, and the Mohegan Sun casino? And why has Sonalysts grown from a single small building to a complex with about 450 employees and $45 million in annual sales -nearly a decade after the fall of the Berlin Wall dramatically reduced defense spending? "It's the coolest place I've ever seen," said Laura Kent director of the Connecticut Technology Council and a Sonalysts tour veteran.

"My feeling is that they give people with ideas chances to play with them." Company officials say Sonalysts co-founders David Hinkle and his wife, Muriel, understood that the company could embrace a militarylike passion for order, yet still nurture and encourage creative people. The visit to Rovera's weather unit illustrates not only an emphasis on punctuality at Sonalysts, but also the company's adaptability. The company was founded 25 years ago on its ability to help cold warriors of the United States pick up the ping of sonar signals bounced off the hulls of Soviet submarines. "We flipped the model over and decided to look at things from the surface to the ionosphere," Toriello said The idea for the weather service and those for most of the 11 other business ventures Sonalysts has created have come from employees, said Jane E. Goldsmith, who handles much of the company's marketing.

After reviewing business plans, a committee of company managers approved those ventures and rejected only the creation of a mi-crobrewery and solar-powered car division. Unlike the military, Goldsmith said, it is hard to pull rank at Sonalysts because few people have job titles at the privately held company, which is owned by an employee cooperative. "We have 30 submarine captains and people who have never set foot in a boat. We have crew cuts and ponytails," Goldsmith said. "None of this would work unless you had the vision of the Hinkles.

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