CALIFORNIA: L.A. COUNTY WILL FILE TOBACCO LAWSUIT

      The Los Angeles County Board of Supervisors agreed yesterday
 to file a lawsuit against the tobacco industry "seeking huge
 damages" to recoup the Medicaid costs of treating smoking-related
 illnesses.  LOS ANGELES TIMES reports that L.A. County, the
 nation's "most populous county" with more than 9.2 million
 residents, will become the third largest plaintiff involved in
 the current "wave" of tobacco litigation, behind Texas and
 Florida.
      ALL ABOARD:  The county's move comes less than one week
 after San Francisco officially filed a similar suit against the
 tobacco industry.  Under an agreement reached by the supervisors,
 L.A. County will either join the San Francisco suit or file a
 separate case.  L.A. County Supervisor Zev Yaroslavsky, who
 "pressed" for the suit, said he has consulted with a private law
 firm about handling the county's case on a contingency basis.
      BIG BUCKS:  Yaroslavsky said that the county has the
 "opportunity to recover hundreds of millions of dollars" for its
 Medicaid system.  According to a study conducted by the
 University of California-San Francisco in 1994, the county spends
 $1.2 billion annually on illnesses related to smoking, $372
 million of which is "borne by the financially troubled public
 health system."  County Health Services Director Mark Finucane
 noted that L.A. is "bearing a heavy financial burden" because its
 "huge" immigrant population is being "targeted" by the tobacco
 industry's marketing tactics. 
      TOBACCO:  Philip Morris said the county's suit would be
 without "legal merit and would ultimately cost the taxpayers ...
 millions of dollars."  R.J. Reynolds spokesperson Peggy Carter
 said that the county doesn't "have a basis" for the suit because
 they can't show "economic loss."
      A GROWING MOVEMENT:  Santa Clara County's Board of
 Supervisors voted yesterday to join San Francisco's suit.  San
 Francisco city attorney Louise Renne said, "The more local
 governments that are involved in this the better"
 (Rabin/Weinstein, 6/12).
      NEW MEDICARE CONTRACTOR:  Health Care Financing
 Administration Administrator Bruce Vladeck announced Monday that
 National Heritage Insurance Company (NHIC), a subsidiary of
 Electronic Data Systems, has been selected to be the new Medicare
 Part B carrier in California.  The move follows HCFA's
 announcement in April that Blue Shield of California would not be
 renewing its contract to process the claims (see AHL 4/19).  NHIC
 will assume Blue Shield's duties in Northern California and
 Riverside and San Bernardino counties in Southern California.  In
 FY '95, Blue Shield processed 23.5 million claims and paid about
 $1.6 billion in benefits.  NHIC will retain most of Blue Shield's
 Medicare employees and will begin processing claims under the
 contract by early next year (HCFA release, 6/10).