Author Archives: henrykotula

UnitedHealth’s Surgical Care Affiliates fires back at DOJ in collusion case

Posted on by • Posted in Antitrust, Competition, Dept of Justice (DOJ), Due Process, Grand Jury, Health Insurance Industry, Indictment, Law Enforcement, Lawsuit, Market Consolidation, Market Power, Sherman Antitrust Act • Leave a comment
https://www.beckershospitalreview.com/legal-regulatory-issues/unitedhealth-s-surgical-care-affiliates-fires-back-at-doj-in-collusion-case.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Senate narrowly confirms new head of Justice Department's criminal division, who worked for Russian bank | PBS NewsHour

Surgical Care Affiliates, which is part of UnitedHealth Group’s Optum division, hit back at the Department of Justice’s defense of a federal case accusing SCA of agreeing with competitors to not poach senior-level employees.

In a May 14 proposed reply brief supporting its bid to dismiss the case, SCA argued the Justice Department’s defense is unlawful and violates due process rights.

“The government seeks to criminally prosecute as a per se Sherman Act violation an alleged agreement not to solicit another company’s employees, even though no court in history has ever definitively found such an agreement unlawful under any mode of analysis,” according to the proposed reply brief. “Not only is this kind of agreement not illegal per se, but subjecting a practice to per se condemnation for the first time in a criminal prosecution would violate bedrock guarantees of due process.” [emphasis in original]

In January, a federal grand jury charged SCA and its related entities, which own and operate outpatient medical care centers, with entering and engaging in conspiracies with other healthcare companies to suppress competition between them for the services of senior-level employees. 

In an email statement to Becker’s Hospital Review, SCA said at the time of the charges: “This matter involves alleged conduct seven years before UnitedHealth Group acquired SCA and does not involve any SCA ambulatory surgery centers, their joint owners, physician partners, current leadership or any other UnitedHealth Group companies. SCA disagrees with the government’s position, and will vigorously defend itself against these unjustified allegations.”

The charges are the first from the department’s antitrust division in its ongoing investigation into employee allocation agreements. Violators of the Sherman Act can face a maximum $100 million fine, or twice the gain derived from the crime or twice the loss suffered by victims if the amount is greater than the maximum. 

Providence’s operating loss narrows to $221.9M

Posted on by • Posted in Health System, Hospital, Hospital Industry, Net Income, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/providence-s-operating-loss-narrows-to-221-9m.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Providence Medical Center reports COVID-19 outbreak within hospital | KOMO

Providence, a 52-hospital system based in Renton, Wash., saw its operating loss hit $221.9 million in the first quarter, compared to an operating loss of $276.2 million recorded in the first quarter of 2020, according to financial documents released May 17.

“We’re turning a corner and seeing signs of renewal,” said Rod Hochman, MD, president and CEO of Providence. “Throughout this crisis, the caregivers of Providence have stepped up to respond to the needs of our communities, and we are incredibly grateful to everyone who has been serving on or supporting the front lines of care.” 

The health system recorded revenue of $6.4 billion in the quarter ended March 31, up 1.6 percent from the same period in 2020. Providence said the growth was driven by 9 percent growth in capitation revenue and 57 percent growth in diversified revenue.

Operating expenses reached $6.7 billion in the first quarter, an increase of 1 percent from the same period last year. Providence said the expense increase was driven by costs to support caregivers and to serve patients, including labor and more personal protective gear and drugs. 

After factoring in $306.5 million in nonoperating income, Providence ended the quarter with a net income of $84.6 million. In the same period last year, Providence recorded a net loss of $1.1 billion. Last year’s net loss was largely attributed to negative financial market forces. 

Cartoon – Rebuilding Customer Trust

Posted on by • Posted in Benchmarking, Cartoon, Consumer Engagement, Consumer Loyalty, Consumer Trust, Consumerism, Honesty, Integrity, Leadership, Leadership Culture, Leadership Integrity, Leadership Intent, Leadership Trust, Lies, Marketing, Misleading, Misleading Metric, Rebuilding, Transparency, Trust, Truth • Leave a comment
Cartoon – How can we Rebuild Trust | HENRY KOTULA

3 Ascension Texas hospitals to pay $20.9M for alleged kickbacks

Posted on by • Posted in Dept of Health and Human Services (HHS), Fraud and Abuse, Health System, Hospital, Hospital Industry, Internal Control, Kickbacks, Leadership, Leadership Culture, Leadership Intent, Leadership Legacy, Leadership Trust, Medical Group, Physician Practice Management, Physician Self-Referrals, Self Interest • Leave a comment
https://www.beckershospitalreview.com/legal-regulatory-issues/3-ascension-texas-hospitals-to-pay-20-9m-for-alleged-kickbacks.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Kickback Definition

Three Ascension hospitals in Texas agreed to pay $20.9 million for allegedly paying multiple physician groups above fair market value for services, according to a recent news release from the HHS’ Office of Inspector General.

The three Texas hospitals are Ascension’s Dell Seton Medical Center in Austin, Ascension Seton Medical Center Austin and Ascension Seton Williamson in Roundrock. Ascension self-disclosed the conduct to the inspector general.

The hospitals allegedly violated the Civil Monetary Penalties Law, including provisions related to physician self-referrals and kickbacks in seven instances, according to the April 30 news release.

Some of the allegations the report outlined include Dell Seton paying an Austin physician practice above fair market value for on-call coverage; Ascension Seton Austin paying an Austin practice above fair market value for transplant on-call coverage and administrative services; and Ascension Seton Williamson paying a practice above fair market value to lease the practice’s employed registered nurses and surgical technologists who assisted in surgeries at the hospital. 

The release did not disclose the physician groups allegedly involved.

Access the full release here. 

CommonSpirit posts $1.7B net income in Q3

Posted on by • Posted in Health System, Hospital, Hospital Industry, Market Uncertainty, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/commonspirit-posts-1-7b-net-income-in-q3.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
CommonSpirit aims to cut cost after merger, HQ move

After posting a $1.4 billion net loss in the third quarter of fiscal year 2020, CommonSpirit, a 140-hospital system based in Chicago, saw improved finances in the third quarter of fiscal year 2021, according to financial documents released May 14. 

CommonSpirit, formed in 2019 through the merger of San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives, reported revenues of $8.8 billion in the third quarter of fiscal 2021, up from $7.8 billion recorded in the same quarter one year prior. The health system said the third quarter of fiscal 2021 was the first period to fully include results from Virginia Mason Fransican Health, an 11-hospital system that was formed in January and joined the CommonSpirit network. 

The health system’s operating expenses also increased year over year. It reported total expenses of $8.3 billion in the third quarter of fiscal 2021, compared to about $8 billion recorded in the same period last year. 

CommonSpirit ended the third quarter of fiscal 2021 with an operating income of $539 million, a figure that included federal relief aid and a pre-tax gain on the sale of joint venture shares. CommonSpirit said without the aid and pre-tax gain, the health system would have posted an operating loss of $117 million in the quarter ended March 31, “highlighting the continuing concerns around overall patient volumes and the ongoing impact of the pandemic.”

After factoring in $1.2 billion in non-operating income, including $636 million in investment income, CommonSpirit posted a net income of $1.7 billion in the quarter ending March 31. In the same quarter one year prior, CommonSpirit recorded a net loss of $1.5 billion. 

“In many ways this quarter was similar to what we experienced over the last year, with a very challenging period followed by a robust recovery,” said CommonSpirit CFO Dan Morissette in a May 14 news release. “With vaccination rates rising and many people returning to their pre-pandemic routines, we expect to continue a strong path to recovery, while also recognizing that we will likely see operational impacts from the pandemic for quite some time.”

CommonSpirit said it also is working to strengthen its financial foundation by realizing operational synergies this year. The goal is to realize $350 million to $400 million in savings during fiscal 2021, and it is on track to meet or surpass that goal. 

Walmart, Amazon continue to build healthcare presence

Posted on by • Posted in Amazon, Amazon Care, Amazonification of Healthcare, Competition, Disruption, Innovation, Medicare Advantage, Pharmacy, Primary Care, Primary Care Strategy, Retail Clinic, Retail Healthcare, Retail Pharmacy, Telemedicine, Virtual Care Strategy, Virtual Healthcare, Virtual Visit, Walmart • Leave a comment
The Weekly Gist: The Unmasked! Edition
Walmart Health: A Deep Dive into the $WMT Corporate Strategy in Health Care | by Nisarg Patel | Medium

Late last week, retail giant Walmart announced its plan to acquire national telemedicine provider MeMD, for an undisclosed sum. According to Dr. Cheryl Pegus, Walmart’s executive vice president for health, the acquisition “complements our brick-and-mortar Walmart Health locations”, allowing the company to “expand access and reach consumers where they are”.

MeMD, founded in 2010, provides primary care and mental health services to five million patients nationally. The acquisition extends Walmart’s health delivery capabilities beyond the handful of in-store and store-adjacent clinics it runs, and follows the launch of its own Medicare Advantage-focused broker business, and partnership with Medicare Advantage start-up Clover Health to offer a co-branded insurance product. 

Walmart has been climbing the healthcare learning curve for several years, building on its sizeable retail pharmacy business, and seems to have hit on a successful formula in its latest in-person clinic model, which includes primary care, behavioral health, vision, and dental services. The retailer plans to add 22 new clinic locations by the end of this year, and its new telemedicine offering will allow it to expand its virtual reach even further.

The MeMD acquisition also represents a new front in Walmart’s head-to-head competition with Amazon, which launched its own national telemedicine service earlier this year. That service, Amazon Care, is targeted at the employer market, and right on cue, Amazon announced its first customer sale last week—to Precor, a fitness equipment company. 

Both retail giants are slowly circling the $3.6T healthcare industry, targeting inefficiencies by deploying their expertise in convenience and consumer engagement. Incumbents beware.