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29% of US health system payments tied to alternative models

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https://www.beckershospitalreview.com/finance/29-of-us-health-system-payments-tied-to-alternative-models.html

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The percentage of U.S. health system payments linked to alternative payment models grew to 29 percent in 2016, up from 23 percent a year prior, according to a Health Care Payment Learning & Action Network report.

For the analysis, LAN calculated the amount of health plan in- and out-of-network spending that went through APMs. Analysts examined data from 78 health plans, three fee-for-service Medicaid managed care states and fee-for-service Medicare.

Here are three key findings from the report.

1. Forty-three percent of systems’ payments flowed through fee-for-service or legacy payment models in 2016. This is compared to 62 percent in the year prior.

2. Payments through pay-for-performance or care coordination fees reflected 28 percent of payments last year, up from 15 percent in 2015.

3. APM spending totaled about $354.5 billion nationally in 2016.

Allegheny Health Network grows operating income to $10.6M

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https://www.beckershospitalreview.com/finance/allegheny-health-network-grows-operating-income-to-10-6m.html

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Pittsburgh-based Allegheny Health Network saw its operating performance turn around in the third quarter of fiscal year 2017, fueled by higher patient volumes and efficiency.

The seven-hospital system reported operating income of $10.6 million in the third quarter ended Sept. 30, according to unaudited financial documents. This is a year-over-year improvement from the network’s $17.6 million operating loss in the third quarter of 2016.

Dan Laurent, Allegheny Health Network’s vice president of internal and external communications, told Becker’s Hospital Review the positive performance reflects increased physician office visits, more efficient operations, readmission reductions and favorable payer contracts, among other factors.

The health system recorded revenue of $771.3 million in the third quarter, up from $711.7 million in the same period a year prior.

At the same time, the health system saw expenses widen to $760.8 million, compared to $729.3 million during the third quarter of 2016. Mr. Laurent said the system’s third quarter financial performance reflected investments in expansion and renovations at Natrona Heights, Pa.-based Allegheny Valley Hospital, Saint Vincent Hospital in Erie, Pa., as well as an Epic EHR implementation at its Jefferson Hospital in Jefferson Hills, Pa.

Overall, the system recorded net income of $13.4 million in the third quarter of this year, up from a net loss of $16.3 million in the same period last year.

CHS reports $110M net loss, completes 30-hospital divestiture spree

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https://www.beckershospitalreview.com/finance/chs-reports-110m-net-loss-completes-30-hospital-divestiture-spree.html

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Community Health Systems, a 127-hospital chain based in Franklin, Tenn., posted a net loss of $110 million in the third quarter of 2017, compared to a net loss of $79 million in the same period of the year prior.

CHS said revenues dipped to $3.67 billion in the third quarter of this year, down from $4.38 billion in the same period of 2016. The decrease in revenue was attributable, in part, to lower patient volume. On a same-facility basis, admissions were down 14.8 percent in the third quarter of this year. When adjusted for outpatient activity, admissions decreased 15.5 percent year over year.

The company’s financials also took a $40 million hit from hurricanes Harvey and Irma in the three months ended Sept. 30. CHS said the hurricanes caused it to incur additional expenses and miss out on revenues.

Although CHS’ operating expenses declined in the third quarter, one-time charges took a toll on the company’s bottom line. CHS said its third quarter financial results included $33 million in impairment charges and losses related to the sale of some of its hospitals.

To improve its finances and reduce its heavy debt load, CHS put a turnaround plan into place in 2016. As part of the initiative, the company announced plans this year to sell off 30 hospitals. With the sale this week of Highlands Regional Medical Center in Sebring, Fla., and Merit Health Northwest Mississippi in Clarksdale, CHS Chairman and CEO Wayne T. Smith said Wednesday the 30 hospital divestitures are complete.

“Looking forward, we remain focused on strategic initiatives that we believe will yield positive results in the future,” said Mr. Smith. “Our goal is to emerge from this process with a sustainable group of hospitals that are positioned for long-term success and growth.”

CHS brought down its long-term debt load to $13.9 billion in the third quarter of this year, from $14.8 billion in the same period of 2016.

Trump suggests repealing ObamaCare mandate in tax bill

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Trump suggests repealing ObamaCare mandate in tax bill

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President Trump on Wednesday suggested using the GOP tax bill to repeal ObamaCare’s individual mandate.

“Wouldn’t it be great to Repeal the very unfair and unpopular Individual Mandate in ObamaCare and use those savings for further Tax Cuts,” Trump tweeted.

The idea is being pushed by Sen. Tom Cotton (R-Ark.) and also has the backing of House Freedom Caucus Chairman Mark Meadows (R-N.C.).

Meadows said Wednesday he supports repealing the mandate in tax reform and thinks “ultimately” it will be included because he is going to push for it. He said he has been talking to Cotton about it.

A Cotton spokeswoman told The Hill that Cotton and Trump spoke by phone about the idea over the weekend and “the President indicated his strong support.”

Senate Finance Committee Chairman Orrin Hatch (R-Utah) this week said that he wouldn’t rule out including repeal of the mandate in the tax legislation.

But other top Republicans have rejected the idea, including House Ways and Means Committee Chairman Kevin Brady (R-Texas), Senate Majority Whip John Cornyn (R-Texas) and Sen. John Thune (R-S.D.). They fear adding the ObamaCare change would jeopardize tax reform.

“Look, I want to see that individual mandate repealed,” Brady said during an interview with radio host Hugh Hewitt on Tuesday. “I just haven’t seen, no one has seen, 50 votes in the Senate to do it.”

Brady added that he would be open to adding a repeal of the mandate to the House bill if the Senate passed it first.

Asked Wednesday about the president’s tweet, Senate Majority Whip John Cornyn (R-Texas) threw cold water on the idea.

“I think tax reform is complicated enough without adding another layer of complexity,” Cornyn told The Hill.

Thune, meanwhile, said mandate repeal is “not currently a part of our deliberations.”

But Thune added that some members have expressed interest in the idea and said he was “somewhat” interested in it because of the revenue implications.

Sen. Mike Rounds (R-S.D.) on Tuesday also dismissed adding a repeal of the mandate to tax reform.

“If there was a way to do it, I’d be open to it, but I’m not going to pitch it because I want to focus on taxes in the tax reduction plan,” Rounds told reporters.

The Congressional Budget Office has estimated that repealing the mandate would save the government $416 billion over a decade.

The mandate requires people, with some exceptions, to pay a fine to the IRS if they do not have health insurance.

Experts have said repealing the mandate would result in massive premium spikes and a major increase in the number of uninsured people.

It could also send ObamaCare exchanges into a “death spiral” because it would discourage healthy younger individuals to sign up for insurance.

Asked about it on Wednesday after Trump’s tweet, Hatch again did not rule out the move, but cautioned that he wants to keep health care separate from tax reform, a point echoed by GOP aides.
“I think we ought to do tax reform. If they want to do something on health care they can do that separate,” Hatch said. It was not clear who “they” referred to.
“I’d have to really look at all sides of that. I’ve never been very excited about the individual mandate,” Hatch said.

Moody’s assigns ‘Aa3’ rating to MultiCare Health System’s bonds

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https://www.beckershospitalreview.com/finance/moody-s-assigns-aa3-rating-to-multicare-health-system-s-bonds.html

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Moody’s Investors Service assigned its “Aa3” rating to Tacoma, Wash.-based MultiCare Health System’s proposed $318 million series 2017A and 2017B revenue bonds.

Additionally, Moody’s affirmed the “Aa3” rating on MultiCare Health’s parity debt, affecting $847 million of rated debt.

The affirmation and assignment are a result of several factors, including the health system’s strong market position, greater revenue diversity and recent acquisition of two hospitals in Spokane, Wash. Moody’s also acknowledged MultiCare Health’s weaker operating performance in fiscal year 2016 and more than 30 percent increase in debt and risks associated with integrating into the Spokane market.

The outlook was revised to negative from stable, reflecting the health system’s increased debt burden and anticipated decreases in profitability as the health system integrates into a new market.