RWJBarnabas to acquire Trinitas

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/rwjbarnabas-to-acquire-trinitas.html

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After months of negotiations, Elizabeth, N.J.-based Trinitas Regional Health Network has signed a letter of intent to join Robert Wood Johnson Barnabas Health System in West Orange, N.J.

Under the agreement, RWJBarnabas will become the parent company of Trinitas, a 554-bed Catholic acute care teaching facility. Trinitas will remain a Catholic institution, and its board will maintain oversight of the day-to-day operations of the facility.

According to the letter of intent, RWJBarnabas plans to invest money into the medical center and its affiliates for expansion.

The two parties expect to reach a definitive agreement before the end of the year. 

RWJBarnabas is an academic medical system comprising 11 acute care hospitals, three acute care children’s hospitals and a pediatric rehabilitation hospital, among other physician practices and outpatient clinics. 

 

Health care’s fraud and abuse laws are getting overhauled

https://www.axios.com/health-care-fraud-abuse-stark-law-antikickback-changes-fd354212-9583-44c7-85e4-86e4690cc56e.html

Doctors dressed in blue operate on a patient in a surgical suite.

The Trump administration is proposing to loosen regulations that prohibit doctors from steering patients insured by federal programs to facilities where they have a financial interest and that outlaw health care companies from offering bribes and kickbacks in exchange for patient referrals.

Why it matters: The industry has long clamored for an overhaul to these laws, which companies say obstruct their goals of providing “value-based care.” But critics worry the broad and vague changes could engender more fraud and abuse than there already is.

Driving the news: The Department of Health and Human Services would create new exemptions for the physician self-referral law and the federal anti-kickback statute — decades-old, complex laws that forbid payments that encourage unnecessary care and increase taxpayer costs.

  • Hospitals, doctors, nursing homes and other entities would be able to create “value-based arrangements,” and those deals could include exchanging bonuses or other types of “remuneration” without running afoul of referral laws.
  • For example, under these exemptions, a hospital could provide a nursing home with a behavioral health nurse for certain discharged patients, or a hospital could donate cybersecurity technology to a physician’s office.
  • Many exemptions already exist, including for organizations called “accountable care organizations” that try to keep a patient’s care within a narrow set of hospitals and doctors, but these changes would go much further.

Between the lines: The overarching concern is everyone’s definition of “value” is different. How will regulators know whether providers are acting in good faith to coordinate care, or if they are using “value-based care” as a cover to control patient referrals and enrich themselves?

A major exclusion: Pharmaceutical companies, medical device firms, labs and medical equipment makers are cut out from the changes because the federal government is afraid those companies would “misuse the proposed safe harbors.”

  • Pharma lobbyists, in particular, have pushed hard to change the law so drug companies could directly subsidize drug copays for Medicare and Medicaid patients, even though federal officials have said that practice “masks the high prices those companies charge for their drugs.”
  • HHS Secretary Alex Azar told reporters the government may consider separate regulations for value-based drug contracts, even though the evidence of those deals’ effectiveness is limited at best.

The bottom line: These changes come at the same time that hospitals, physicians, pharmaceutical companies and others are paying out billions of dollars every year in fraud settlements.

  • Public comments are due Dec. 31, and if this comment process is anything like the initial requests that asked for guidance, the industry will be heavily involved.

 

 

 

Medicare overpays hospitals $1B each year for graduate medical education, study finds

https://www.beckershospitalreview.com/payer-issues/medicare-overpays-hospitals-1b-each-year-for-graduate-medical-education-study-finds.html?oly_enc_id=2893H2397267F7G

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Medicare overpaid hospitals about $1.3 billion in 2015 for the government’s Teaching Health Center Graduate Medical Education program, according to a study published in JAMA Internal Medicine.

The Graduate Medical Education rate is $150,000 per resident. While 25 percent of hospitals received less than $106,000 per resident in 2015, 25 percent received more than $182,000 per resident. That same year, nearly half of teaching hospitals got more than $150,000 per resident.

If Medicare GME payments were capped at the $150,000 rate, researchers predict Medicare would save more than $1 billion every year.

“Our study suggests Medicare GME may be overpaying some hospitals up to $1.28 billion annually,” said Candice Chen, MD, lead study author and associate professor of health policy and management at the George Washington University Milken Institute School of Public Health in Washington, D.C. “Those funds could be redirected and used to strengthen the physician workforce, especially in underserved areas.”

 

 

 

25% of US healthcare spending is waste, study finds

https://www.beckershospitalreview.com/finance/25-of-us-healthcare-spending-is-waste-study-finds.html?oly_enc_id=2893H2397267F7G

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About 25 percent of U.S. healthcare spending can be classified as waste, according to a new study published in JAMA Oct. 7. 

For the study, researchers from Humana and the University of Pittsburgh School of Medicine analyzed 54 peer-reviewed studies, government reports and other medical literature to estimate the levels of waste in the U.S. healthcare system.

Researchers divided waste into six previously developed categories including: failure of care delivery; failure of care coordination; overtreatment or low-value care; pricing failure; fraud and waste; and administrative complexity. 

Administrative complexity accounted for the most waste with $265.6 billion annually, followed by pricing failure or inefficiencies, which accounted for up to $240.6 billion in waste per year.

Approximately $300 billion in waste accrued from failure of care delivery, failure of care coordination and overtreatment. The study estimated that about half of this waste could be avoided.

Overall, the researchers found that the cost of waste in the U.S. healthcare system ranges from $760 billion to $935 billion annually.

Of the $760 billion to $935 billion of waste, researchers estimated that using interventions found to reduce waste could cut between $191 billion and $282.1 billion in healthcare spending.

Access the full report here