Moody’s: Nonprofit healthcare medians reversed trajectory in FY 2016

http://www.beckershospitalreview.com/finance/moody-s-nonprofit-healthcare-medians-reversed-trajectory-in-fy-2016.html

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Annual expense growth for nonprofit and public healthcare organizations outpaced annual revenue growth in fiscal year 2016, according to Moody’s Investors Service.

After years of cost containment, annual expense growth hit 7.2 percent in fiscal year 2016, which outpaced annual revenue growth of 6 percent. The expenses were fueled by several factors, including rising pension contributions and higher labor and pharmaceutical costs, according to Moody’s.

“Higher expenses coupled with positive, albeit slower, revenue growth, contributed to lower profitability, tempered liquidity growth, and moderation of nearly all financial metrics,” said Beth Wexler, a Moody’s vice president.

Ms. Wexler said total admissions at nonprofit and public hospitals grew in fiscal year 2016, but the growth rate slowed due to stabilization of the uninsured population.

The medians are based on an analysis of audited fiscal year 2016 financial statements for 323 freestanding hospitals, single-state health systems and multi-state healthcare systems, representing 81 percent of all Moody’s rated healthcare entities.

For-profit hospital operators likely to experience weak patient admissions through 2018

http://www.beckershospitalreview.com/finance/for-profit-hospital-operators-likely-to-experience-weak-patient-admissions-through-2018.html

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Major for-profit hospital operators were plagued by weak patient volumes in the quarter that ended June 30, and this trend is likely to continue through next year, according to Reuters.

Dallas-based Tenet Healthcare’s net loss ballooned from $44 million in the second quarter of 2016 to $56 million in the second quarter of this year. The company’s hospitals experienced softer patient volume in the second quarter of 2017, including fewer patients seeking elective procedures, according to Reuters.

Tenet’s rivals, such as Nashville, Tenn.-based HCA Healthcare and Franklin, Tenn.-based Community Health Systems also experienced weak patient volumes in the second quarter. HCA ended the second quarter of 2017 with net income of $657 million, which was down slightly from $658 million in the same period of 2016. CHS recorded a net loss of $137 million in the second quarter of this year, compared to a net loss of $1.43 billion in the same period of 2016.

Tenet, HCA, CHS and other for-profit hospital operators experienced a surge in admissions in 2014 and 2015 due to higher insured rates under the ACA. However, many insurers have pulled back from the ACA exchanges since last year, which has caused the for-profit hospital operators to see lower patient volumes, analysts told Reuters.

The companies are expected to see weak patient admissions next year, as the future of the ACA remains uncertain and patients with high-deductible health plans face soaring out-of-pocket costs.

Presence Health to join Ascension

http://www.beckershospitalreview.com/hospital-transactions-and-valuation/presence-health-to-join-ascension.html

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St. Louis-based Ascension, the nation’s largest nonprofit Catholic health system, signed a nonbinding letter of intent to acquire Chicago-based Presence Health, Illinois’ largest Catholic health system.

Under the deal, Presence’s medical centers, outpatient facilities and other care sites would be operated by Amita Health, a joint venture created by Ascension’s Arlington Heights-based Alexian Brothers Health System and Hinsdale, Ill.-based Adventist Midwest Health, part of Altamonte Springs, Fla.-based Adventist Health System. Ascension would own the facilities.

Presence Life Connections’ skilled nursing and assisted and independent living facilities would join Ascension Living, Ascension’s senior care subsidiary, the companies said in a news release.

“The mission, values and history of Presence Health clearly align well with those of Ascension, as both systems are dedicated to caring for all, with special attention to persons living in poverty and those most vulnerable,” Ascension President and CEO Anthony Tersigni, EdD, said in the release. “We believe this will strengthen Catholic healthcare not only in the region but throughout the country as we are all dedicated to delivering personalized, compassionate care.”

Mark Frey, president and CEO of Amita and senior vice president of St. Louis-based Ascension Healthcare, a division of Ascension, also expressed excitement about the proposed transaction.

“Since we brought together Alexian Brothers Health System and Adventist Midwest Health to form Amita Health two years ago, we’ve always looked for opportunities to add like-minded partners with similar values to our system,” he said. “Bringing Presence Health into Ascension and AMITA Health is a perfect fit and an exciting continuation of our commitment to increase access to quality healthcare in the many communities we serve.”

Presence President and CEO Michael Englehart echoed these sentiments, saying his system “look[s] forward to working together to engage in this joint effort to expand, and continue to deliver, quality care for our patients and residents, as well as provide additional clinical opportunities and patient care resources to all our physicians and associates.”

The systems said a definitive agreement is expected in the future “pending detailed legal and financial due diligence, along with regulatory and canonical approval.” The deal, if completed, would add 10 Presence hospitals to Ascension and Amita, increasing Ascension’s hospitals to 151. Peoria, Ill.-based OSF HealthCare earlier this month announced plans to own the other two Presence hospitals — Presence Covenant Medical Center in Urbana, Ill., and Presence United Samaritans Medical Center in Danville, Ill.

Terms of the proposed deal were not disclosed.

 

Appeals court overturns ruling requiring HHS to clear Medicare appeals backlog by 2021

http://www.beckershospitalreview.com/finance/appeals-court-overturns-ruling-requiring-hhs-to-clear-medicare-appeals-backlog-by-2021.html

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The U.S. Appeals Court for the District of Columbia on Friday overturned an order requiring HHS to clear its backlog of Medicare reimbursement appeals by the end of 2020.

On Dec. 5, 2016, U.S. District Judge James Boasberg granted a motion for summary judgment filed by the American Hospital Association in AHA v. Burwell — a lawsuit that centers on the Recovery Audit Contractor Program.

He ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before the agency’s Office of Medicare Hearings and Appeals over the next four years, reducing the backlog by 30 percent by the end of 2017; 60 percent by the end of 2018; 90 percent by the end of 2019; and to completely eliminate the backlog by Dec. 31, 2020.

HHS filed a motion Dec. 15, 2016, asking the judge to reconsider his decision. HHS argued it would be impossible to reduce the appeals backlog on the schedule provided by the court without improperly paying claims, regardless of merit. In January, Judge Boasberg denied HHS’ motion for reconsideration.

In late January, HHS filed an appeal in the case, seeking to avoid the district court’s order enforcing the plan to clear the appeals backlog by the end of 2020.

On Friday, the appellate court sided with HHS.

Since HHS said it was impossible to lawfully comply with the district court’s order, the appellate court ruled it was “an error of law” and “an abuse of discretion” for the district court judge to order HHS to abide by the schedule to clear the Medicare appeals backlog.

“In sum, it was an abuse of discretion to tailor the mandamus relief without tackling the Secretary’s claims that lawful compliance would be impossible,” states the appellate court’s opinion.

The appellate court held that on remand the lower court should determine if compliance with the timetable to reduce the Medicare appeals backlog is impossible.

A Looming Leadership Talent Crisis: Can you solve the Leadership gap?

https://cdn2.hubspot.net/hubfs/498900/WP_Healthcare_Looming%20Talent%20Crisis.pdf?t=1503343642250

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Sutter will shift 10,000 Anthem Medi-Cal enrollees to community health centers

http://www.sacbee.com/news/local/health-and-medicine/article167900272.html

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In Sacramento and Placer counties, roughly 10,000 adult Medi-Cal enrollees with Anthem Blue Cross are learning this summer that Sutter’s primary-care doctors will no longer see them.

Instead, those patients are being shifted to primary-care doctors at community health centers such as Sacramento’s WellSpace Health or Auburn’s Chapa-De Indian Health, said Dr. Ken Ashley, the medical director for primary care at Sutter Medical Group. He said the change in providers will allow the patients to access more services.

“Some of the things that the (community health centers) can provide with the funding that they are receiving are things that sometimes we struggle to find for our Medi-Cal patients, things like optometry and dental, behavioral medicine,” Ashley said. “I feel like these patients are finally going to receive things I could not provide as their primary-care doctor. I’m OK with our partners helping to take care of these patients.”

Sutter, Dignity Health, UC Davis and other providers have all contributed funding and expertise to expand the network of community health centers, more formally known as federally qualified health centers.

The so-called FQHC’s have long been the primary-care delivery network for uninsured, low-income people across the country, but Sacramento did not have a strong network of the centers until the Affordable Care Act set aside funding to help them grow to meet the needs of an expanding Medicaid population.

That flood of new patients has swamped many primary-care providers and has made it harder for all patients to get appointments through commercial providers, Ashley said. Meanwhile, in meetings with the leaders of local FQHC’s, he and other leaders were hearing how those organizations had expanded services, lengthened hours and had capacity for more patients.

About a year ago at one of the meetings, Ashley said, all the attendees began to feel that, if they could shift Anthem’s adult Medi-Cal enrollees, they would improve the health of the primary-care delivery system for a broad set of customers.

“We’ve been having a difficult time getting all our patients in at the time they would like, where they would like,” Ashley said. “This is one more step to try to help allow the rest of the community to help us take care of all these patients.”

Jonathan Porteus, the CEO of Wellspace Health, also leads the Central Valley Health Network, a group of health centers up and down the Central Valley that manage almost 3 million visits a year. He said that Anthem began earlier this year investigating whether the FQHC’s truly had the capacity to absorb the adult Medi-Cal patients served through Sutter.

“We were notified – we being the federally qualified health centers – that this change was coming and that there was a keen interest to make sure that it was smooth, that people would not be left without access,” Porteus said. “The wisdom of Sutter and others has been to help our region have a network of federally qualified health centers, a true blanket of care for the first time ever. This is one of the early tests.”

Porteus said he knows that people have questions about whether the quality of care at his centers is on par with what they would receive from primary-care doctors. He said he welcomes those questions because they give him an opportunity to tell the WellSpace story.

“The Joint Commission, which is the accrediting body that accredits hospitals and shuts them down if they don’t think they’re good enough, has accredited us to be a patient-centered medical home, has accredited all our behavioral health,” Porteus said. “This is a standard many of our commercial colleagues in this community don’t have. If you went into some of these primary-care practices and asked them if they had Joint Commission accreditation for ambulatory care, they will tell you ‘no.’”

There will unquestionably be upheaval in this process for both doctors and patients, Ashley said.

Sutter’s pediatricians will continue to provide primary-care to Medi-Cal-enrolled children covered by Anthem Blue , and the insurer’s Medi-Cal enrollees also still will be able to access Sutter specialists. Sutter primary-care doctors will continue to see anyone on Regular Medi-Cal recipients whose medical providers are paid directly by the government.

110 ACOs to know | 2017

http://www.beckershospitalreview.com/lists/110-acos-to-know-2017.html

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In its sixth edition, Becker’s Healthcare is pleased to highlight a variety of Medicare and commercial payer accountable care organizations led by hospitals, health systems, physician groups and other organizations.

Leavitt Partners, a Salt Lake City-based healthcare consulting firm, reports 934 active public and private ACOs in the United States during the first quarter of 2017 covering 2.2 million lives. Over the past year, 138 new ACOs began operation and 46 dropped their accountable care contracts, leading to an 11 percent growth year-over-year, according to Health Affairs.

Several ACOs represented on this list participate in the Medicare Shared Savings Program. Tracks 1 and 2 have limited provider risk; participants can benefit from shared savings but aren’t at risk for loss. MSSP Track 3, added in 2016, creates shared savings opportunities with greater risk. Track 3 ACO providers can share up to 25 percent of savings, but are at risk for loss. The most recently reported data for MSSP ACOs is the 2015 performance year.

CMS launched the Next Generation ACO Model in 2016, requiring providers to shoulder greater financial risk with the potential of earning more shared savings. The Next Generation ACOs qualify as advanced alternative payment models under the Medicare Access and CHIP Reauthorization Act’s Quality Payment Program in the 2017 reporting year. There are currently 45 participants in the Next Generation ACO Model.

These governmental contracts are in addition to commercial ACO arrangements, which at 715 in number, represent the plurality of all contracts, according to Health Affairs. Commercial ACOs tend to cover more lives than their Medicare counterparts.

Becker’s included ACOs on this list based on several factors, such as cost performance, participation in CMS ACO models and participation in innovative commercial agreements. ACOs are presented in alphabetical order. ACOs with multiple contracts are listed by the health system or provider group name.

Swedish Health’s Cherry Hill campus at risk of losing Medicare, Medicaid funding

http://www.beckershospitalreview.com/quality/swedish-health-s-cherry-hill-campus-at-risk-of-losing-medicare-medicaid-funding.html

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CMS is threatening to cut off Medicare and Medicaid funding to Seattle-based Swedish Health’s Cherry Hill campus in 90 days unless it resolves patient safety issues, according to The Seattle Times.

The Washington Department of Health inspected Swedish’s Cherry Hill campus after a February Seattle Times investigative report exposed troubles, including staff members feeling intimidated, patient care concerns and surgeons performing overlapping surgeries.

The state surveyors identified numerous patient safety issues at the Cherry Hill campus, including failure to outline the roles of medical fellows, failure to address behavioral concerns, failure to document surgical tasks of medical residents, failure to listen to staff concerns and failure to track when the attending physician was in the operating room.

“Staff members feared punishment and retaliation for voicing concerns,” the regulators wrote, according to the Seattle Times. “Staff members stated they were frequently bullied and intimidated for voicing concerns about the working conditions in the neurosurgical operating area.”

To keep federal funding for the Cherry Hill campus, Swedish Health must submit a corrective action plan to CMS. Regulators will conduct another survey to ensure the hospital is in compliance with Medicare and Medicaid rules.

Swedish Health said that many of the deficiencies cited have been addressed, according to the report. The system implemented a new policy to ban overlapping surgeries. Additionally, Swedish Health CEO Guy Hudson, MD, insured that the culture of intimidation will be addressed

“We are sorry for what occurred at Swedish Cherry Hill on our watch,” Swedish Health board members told the Seattle Times. “As volunteers, we continue to be deeply committed to our critical governance role in overseeing patient quality and safety, as well as physician credentialing.”

Northside Hospital and Gwinnett Health System agree to merge

https://www.bizjournals.com/atlanta/news/2017/08/17/northside-hospital-and-gwinnett-health-system.html

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After two years of negotiations, Northside Hospital and Gwinnett Health System, the parent of Gwinnett Medical Center, have agreed to merge.

The health systems submitted a merger agreement to the State of Georgia Office of the Attorney General, and if the plan is approved, the combined health system could be operational by early 2018.

Northside and Gwinnett first entered negotiations to merge in September 2015.

“Both systems have taken the necessary time to conduct this process carefully and deliberately,” the health systems said in a release.

It will take two years to fully integrate the two systems.The new system’s name and branding have not been determined yet.

“Northside Hospital is a leader in cancer care, women’s health and specialized surgical care, while Gwinnett Health System has strengths in cardiovascular care, sports medicine and post-acute care,” the systems said on a website launched Aug. 17 to help educate the public about the merger. “The service areas are adjacent to one another — ideal for focusing investment on care expansion, overall clinical capacity and improved patient access.”

No employees from either health system will lose their jobs as a result of the merger.

The Northside-Gwinnett combined system will have 1,479 beds, nearly 21,000 employees and 3,500 physicians.

Northside Hospital has hospitals in Sandy Springs, Cherokee County and Forsyth County. Gwinnett has hospitals in Duluth and Lawrenceville, Ga

UPMC bonds would fund major health care spending in midstate

http://www.pennlive.com/news/2017/08/upmc_bonds_would_fund_major_he.html

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Health care giant University of Pittsburgh Medical Center plans to spend $235 million in the Harrisburg, York and Lancaster areas in 2018. Much of it would go toward a new hospital in York, with some also spent at three other midstate hospitals.

Another $235 million could “potentially” go toward refinancing the loan Harrisburg-based PinnacleHealth System used for its recent purchase of four hospitals. UPMC and PinnacleHealth are in the process of merging, although the transaction still needs government approval.

The building plans were revealed Thursday during a public hearing on raplidly-expanding UPMC’s application for a bond issue through the Pennsylvania Economic Development Financing Authority. UPMC expects to receive $750 million from the bonds,

About $350 million would be used to pay off prior debt and about $400 would go toward new building projects and renovations. All told, UPMC plans to spend $900,000 million on building projects and related upgrades in western and central Pennsylvania in 2018, according to UPMC’s Simon Goehring, who represented UPMC at Thursday’s hearing.

UPMC now covers more than half the state — much more than any other system.

While PEDFA serves as a conduit for selling the bonds, there is no taxpayer funding involved in the bond issue or the funds UPMC would receive, PEDFA Executive Director Steve Drizos said. Going through PEDFA will enable UPMC to sell bonds that are exempt from state and federal interest taxes, resulting in lower costs for bond buyers, and lower financing costs for UPMC.

At Thursday’s legally-required public hearing, Dan Dorsheimer of AIA Benefits Resource Group asked whether UPMC plans to stops accepting any health insurance plans at the central Pennsylvania health care facilities that will come under its umbrella as a result of the PinnacleHealth merger.

Goehring replied that UPMC has no short-term plans to shut out any insurers, but “I can’t say in the long run how things will turn out.” UPMC is unusual among health systems in that it also owns a health insurance company.

In the Pittsburgh region, a dispute between UPMC and health insurer Highmark resulted in UPMC no longer accepting Highmark coverage.

Dorsheimer, whose firm manages employer health benefits and also is an insurance broker, said it’s “disruptive” and detrimental to health care consumers when any local health care providers won’t accept their health insurance.

“You witnessed what went on in Pittsburgh. It’s been very disruptive,” he said following the hearing.

The $235 million that will be spent in the midstate will be concentrated at facilities including Carlisle Regional Medical Center, York Memorial Hospital, which is being replaced, Lancaster Regional Medical Center, and Heart of Lancaster Regional Medical Center. Those are the four recently acquired by PinnacleHealth for $231 million.

PinnacleHealth is one of the region’s largest health care providers

Goehring also said UPMC also plans to spend some of the bond funds on a new hospital in the Pittsburgh area. Some also will be spent in north central Pennsylvania, where UPMC has acquired or plans to acquire several hospitals including the former Susquehanna Health.

A PEDFA committee has already approved the UPMC bond application. Final approval comes from Gov. Tom Wolf. Historically, the governor has typically approved applications that have been approved by the executive board, Drizos said.