Shareholders from both companies back the deal, which remains the subject of a DOJ antitrust review.
Shareholders at Cigna Corp. and Express Scripts overwhelmingly approved the $52 billion merger agreement on Friday morning, the two companies announced.
Early results show that 90% of Cigna shareholders favored the deal, as did 78% of Express Scripts shareholders.
"By approving our proposed combination, Cigna and Express Scripts stockholders recognize and validate the highly attractive value this transaction delivers to all stakeholders," Express Scripts CEO Tim Wentworth said in a media release.
"Together, we will transform healthcare by combining two innovative healthcare services companies that will have the capabilities, financial flexibility, reach and expansion opportunities to create significant and immediate value for clients and stockholders," Wentworth said.
Cigna CEO David M. Cordani called the strong endorsement by shareholders a "recognition of the combination's significant value creation potential."
Cordani has been an unabashed cheerleader for the deal.
"Our combined company will enhance Cigna's differentiated service-based model, fueled by actionable insights and analytics, to drive innovation and meaningful growth in a highly dynamic market environment," Cordani said. "As a result, we will build more effective partnerships, further improve health outcomes and deliver a superior customer experience."
The final voting results will be filed with the Securities and Exchange Commission.
The merger is the subject of a Department of Justice antitrust review. If the deal clears those regulatory hurdles, it is expected to close by the end of this year.
Stakeholders want underserved communities to have the same cutting-edge technology, entrepreneurialism and problem-solving focus that is used by top health systems.
The 17 health systems collaborating in the newly created Medicaid Transformation Projectsay they want to close the gap between the needs of vulnerable populations and the healthcare they receive.
The collaborative, which includes 280 hospitals in 21 states, will focus on several problem areas for underserved communities, including behavioral health, women and infant care, substance use disorder, and avoidable emergency department visits.
Rich Roth, chief strategic innovation officer at San Francisco-based Dignity Health, one of the "anchor" health systems in the collaborative, spoke with HealthLeaders about the project and what the health systems hope to accomplish. The following is a lightly edited transcript.
HLM: Why is the Medicaid Transformation Project Needed?
Roth: There needs to be an injection of the next level of innovation and entrepreneurialism for all communities, including those people who are most vulnerable. There has been a lot of innovation, but sometimes it's innovation for a certain segment of the population but not for everyone. It is incumbent upon us to drive that innovation for all communities, all individuals, regardless of their payer status.
HLM: Can you provide an example of how this transformation would work?
Roth: At Dignity Health, for example, we have strong expertise in digital transformation; using novel care models and digital methods to care for all populations. Other systems have expertise in different things. This is a chance for us to get around the table and help drive transformation based upon our shared accomplishments in unique areas and help to create things that may only work in one state or service area now, and that need fuel to help them scale nationally to accomplish the goals of benefitting all individuals.
That could be through solutions individual systems have created. It could be through an entrepreneurial company, or it could be finding needs at the table for these forward-leaning systems that say "we need a solution in this area" and co-creating something to address problems that are not effectively being addressed.
HLM: One of the project's focus areas is avoidable ER visits. How might that be addressed?
Roth: In an ideal world you want to treat patients in a manner that is close to their home, convenient to their needs and which embraces them in preventative health holistically. There are great examples of this happening throughout the healthcare delivery system, but it's not necessarily done at scale.
At Dignity Health we have been working with a connected inhaler that our teams have helped develop. That work resulted in 100% reduction in hospitalizations, and a 60% reduction in ER visits for children with challenging asthma conditions, with an average savings of $600 per patient per year.
We can scale that throughout Dignity. But if we are to truly address this problem as a nation, that means broader scale beyond what we can do. We are forward-leaning those types of methods and capabilities to scale to other areas of the country and other health systems.
We will also learn from other systems that address similar problems. It will be about understanding the challenges in the ER, and working together to cross the chasm with innovation that makes a difference, and to scale it nationally.
HLM: What metrics will you use to measure success?
Roth: We ultimately are going to measure success in the areas we focus on in their ability to reduce the cost of care, improve quality, and improve access for people who face barriers today.
For example, when you talk about ER overcrowding, interjecting more services that keep people out of the ER in a preventative way. That is a win for us, the systems, and individuals who get a more personalized experienced.
HLM: Where is CMS's role in this project?
Roth: While CMS is not an official member, per se, because that is not their role, we will absolutely work with their programs and advocate and support changes to policies and programs that allow for better support for these communities.
HLM: Andy Slavitt has been an outspoken critic of CMS and President Trump. Could his lead role in this project be seen as a shot across the bow?
Roth: Andy has sat in the CMS chair. He understands how to make change. He has created a strong bipartisan group out of the United States of Care, which includes people from both sides of the aisle. He's been a successful entrepreneur as well. He is going to be an important voice. But if you look at our assemblage of systems, they're from all over the country and they recognize this not as a political problem, but as a community health problem and a public health problem and that is the lens we all see this in.
We see this as an effort to serve patients in communities, regardless of what state you are in. The diversity of the systems in the project and where they're from speaks to that.
HLM: Your media release announcing the project struck a tone of urgency. Why?
Roth: The feeling is that healthcare is changing and we are seeing various issues that exist in our community. With the rise in certain conditions, such as opioids abuse and other public health and social issues, the only way to get in front of it is to take a leadership position and do so in partnership not only with peers but with the entrepreneurial community to create systems, models and processes that are sustainable and can impact change for populations.
Now is the time for forward leaning systems, entrepreneurs and others to partner together to create change. There is a tremendous platform out there. New technologies have been developed. We need to get them in practice, and we need to make sure they are addressing real problems in real communities in ways that helps the healthcare system become more sustainable.
Former CMS Acting Administrator Andy Slavitt will co-lead collaborative that focuses on behavioral health, women and infant care, substance abuse and avoidable ER visits.
Seventeen health systems in 21 states are collaborating to identify, develop, and scale financially sustainable digital solutions to improve healthcare for the 75 million Americans on Medicaid.
The Medicaid Transformation Project will focus on critical challenges facing vulnerable populations across the country, including behavioral health, women and infant care, substance use disorder, and avoidable emergency department visits.
"Geisinger has joined the Medicaid Transformation Project because of AVIA’s emphasis on action. ... The gap between the needs of vulnerable populations and the healthcare they receive is too great," said David Feinberg, CEO of Geisinger, in Danville, Pennsylvania, one of five "anchor" health systems in the collaborative.
"We are no longer interested in discussing the problems our patients are facing or just piloting solutions – we’re interested in solving them as quickly as possible," Feinberg said.
The collaborative will be led by AVIA, the health system digital transformation network, and Andy Slavitt, former acting administrator at the Centers for Medicare & Medicaid Services, and founder of the venture capital firm Town Hall Ventures.
"The current healthcare system fails the people who need it most," Slavitt said. "The Medicaid Transformation Project will be part of a decade-long journey leading some of the best health systems in the country. Our work will be to deepen and refine the best innovations and then implement them at an accelerated pace at providers across the country."
Slavitt is an outspoken critic of the Trump administration and its ongoing efforts to hobble the Affordable Care Act and reform Medicare and Medicaid. It is not clear if the collaborative intends to work with Medicaid, or in spite of it, to achieve its transformational goals. No mention of collaboration with the current leadership at CMS made in a media release issued by the collaborative.
AVIA will work with a team at each health system to implement solutions that share best practices across the network, and create a roadmap for partner organizations to act quickly to create change. The work will feature a Leadership Council, chaired by Slavitt and composed of health system CEOs.
The collaborative said that Medicaid in its existing form is not sustainable, and the fallout from a destabilized program could be catastrophic. Medicaid insures one-in-five Americans, pays for 50% of births in the United States, is the biggest payer for behavioral health services, and with Medicare accounts for 33 cents of every dollar for physician services.
Combined, the 17 hospitals in the collaborative span 21 states, 280 hospitals with more than 53,000 hospitals beds, and more than $100 billion in combined annual revenues.
The collaborative said the allied health systems will be able to better meet their communities' needs by adopting shared digital solutions and innovative care models.
In addition to the five anchor health systems, the 12 other health systems in the Medicaid Transformation Project are:
A white paper from Press Ganey shows how to build the metrics for value-based care, and how to find the right incentives to help the transition.
Thomas H. Lee, MD, CMO at Press Ganey Associates, is a big fan of balanced score cards and incentive programs as critical tools that can help health systems transition from volume to value.
When balanced score cards first emerged in the 1990s, Lee says, the business sector then was much like the healthcare sector is now.
"There was lots of turmoil and mergers and new kinds of strange bedfellows were being thrown together and they needed tools to show what they were trying to accomplish as an organization," Lee says in an interview with HealthLeaders.
"That's where we are in healthcare today. We've got healthcare systems from organizations that were bitter rivals, and we've got newly named organizations that don't mean anything because they're brand new and they picked the words out of some marketing exercise."
Problems arise, however, when health systems attempt to transfer those "lofty" transitional aspirations to clinical care, Lee says. To help with the transition, Press Ganey has issued a white paper that offers suggestions on how to build a balanced scorecard that will measure the metrics that are important for organizational success, and how to find the incentives to help achieve those metrics.
Lee spoke with HealthLeaders. The following is a lightly edited transcript.
HLM: What do you hope to accomplish with this white paper?
Lee: A lot of organizations in healthcare are recognizing the need for fundamental change. It's easy to say "transformation." It's harder to actually execute on it. This is about going from that lofty goal to tactics. If you're going to change, how do you measure, and then what do you do that makes what you're measuring improve. That is what we set out to do, to go from talking about transformation to being tactical.
HLM: What is the most common mistake that hospitals might do in this transition?
Lee: It's getting overwhelmed and then searching for a single magic solution. We have to be ready to think holistically about how the various performance metrics track back to having an engaged workforce. That is an integrated way of looking at things but it is challenging and complex. Don't be overwhelmed and don't look for simple solutions. With complex problems, you break them down and make progress on them.
HLM: How do you determine the correct incentive program for your hospital?
Lee: In the long run we think that financial incentives work best for financial issues, and nonfinancial incentives are most effective for nonfinancial issues such as quality of care and safety. Some of the most respected healthcare systems in the country—Cleveland Clinic, Mayo Clinic, Kaiser Permanente, Geisinger—all four of them do not use financial incentives for quality. They use nonfinancial peer pressure for quality.
But, not everyone has a culture where nonfinancial incentives can be effective. Recognize where you are in the process of owning the culture. Many organizations need financial incentives just to get people to show up for a meeting. If that is where you are, that is where you are. But, you should recognize where you're trying to go is to create a culture where nonfinancial incentives can be more effective.
HLM: What's the problem with financial incentives?
Lee: We see many organizations around the country regretting what they've done with financial incentives. It's often goal setting that is aspirational, but not realistic, such as every physician has to be at the 90th percentile or they lose 2%, 3%, 4% of their income. Then, doing it at the individual doctor level. Those are mistakes that we see that have been made, that are still being made.
Incentives financial and nonfinancial, tend to make people upset because they're supposed to put pressure on people.
HLM: How do you build an effective balanced score card?
Lee: They should be tailored to the organization. These are supposed to be strategic management tools. They're supposed to allow an organization to track something more than their quarterly financial performance. They should also be tracking how are they doing in making progress on the things that should be their competitive differentiators in the long run.
Strategy is based upon what are doing for whom and how are you going to be different? If you are going to be different because your teamwork is superb or you're reliably empathic for patients, then you ought to be tracking those things. You have to ask what is most important for your strategy execution, and those should be the things in your balanced scorecard. They shouldn’t just be the things that are easy to measure.
HLM: What should you keep in mind when you're building this balanced scorecard?
Lee: Organizations and individuals need a goal hierarchy. They need to have clarity on what they are trying to accomplish at the very top. If you don't have an idea of what the goal is, then it's really hard to talk about you're making progress toward your goal.
The successful healthcare organizations that we see put patients first. They are un-ambivalent about it. Meeting the patients' needs is the No. 1 goal. What will help organizations be better and differentiate themselves competitively in their ability to meet patients' needs? That is what the organizations that we see doing the best in healthcare right now do.
The caregiver falsely claimed to provide services for a Medicaid patient who'd been dead for at least six months, his body hidden in a storage unit.
A Missouri nurses faces 10 years in prison after admitting that she falsely claimed to provide Medicaid services to a developmentally disabled man who was found dead and encased in concrete.
Melissa Denise DeLap, 49, a community registered nurse in Columbia, waived her right to a grand jury and pleaded guilty in federal court this week to one count of healthcare fraud, prosecutors said.
DeLap was paid $38 a visit to provide face-to-face evaluations and medical services to Carl DeBrodie, a Medicaid beneficiary in a supported living program operated by Second Chance Homes in Fulton.
Prosecutors said DeBrodie is believed to have died in early September 2016 while under the care of Second Chance Homes, but his disappearance was not reported until April 17, 2017, and his body was found encased in concrete in a storage unit on April 24, 2017.
In that six-months span, DeLap falsified DeBrodie's monthly health summaries for every month in that period, falsely claiming that she had performed a face-to-face assessment of DeBrodie and provided the other services she was required to do as a CRN.
Along with the potential prison time, DeLap must pay $106,795 to Medicaid, surrender her nursing license within six months, and never become licensed again to practice as a nurse in the United States and its territories.
The author of a study examining executive compensation in non-profit healthcare says it's time to ask if a 'self-perpetuating bureaucracy' is worth the money.
The eye-catching lead in a recent study found that CEOs at 22 major nonprofit health systems across the nation saw their compensation nearly double from 2005 to 2015.
The findings show that there exists a widening gap between compensation paid to nonclinical executives and that paid to physicians and nurses, with clinicians on the lagging end.
But lead author Randall E. Marcus, MD, of University Hospitals Cleveland Medical Center/Case Western Reserve University, says this wage gap "is more the symptom than the disease."
"The disease is the cost of all these nonclinical people," Marcus says. "There is no one looking at this closely."
Marcus spoke with HealthLeaders about the study. The following is a lightly edited transcript.
HLM: Why did you do this study?
Marcus: Having been in healthcare for more than 40 years I've seen this growing bureaucracy. There seem to be more administrators running around than people taking care of patients. We were trying to find the data to see if that was true, and we found that by 2015 we had this bloated, self-perpetuating, expensive healthcare bureaucracy.
For every physician on the front lines we are seeing 14 non-physician clinicians; nurses, physical therapists, etc. What was shocking was there was one manager for every physician and 10 nonclinical people. From 2005 to 2015 this bureaucracy has grown substantially. It is contributing way too much to the cost. That's the real takeaway.
HLM: Were you surprised by your findings?
Marcus: Our numbers are probably on the conservative end. When you get the 990s, they hide incentive compensation into one gigantic number for the whole medical center. There are situations where the base salary is less than half of what the overall comp is.
HLM: What is driving this administrative bloat?
Marcus: Certainly, you need administrators to run medical centers. But when you look at 2005-2015, there were a lot of mergers and acquisitions. You would think that would decrease the numbers of nonclinical people. Our data shows it went the other way.
It's like any other bureaucracy. It tends to be self-perpetuating. I make you the vice president of whatever. You quickly hire an administrative assistant and two deputy assistants and they each have an administrative assistant. That is what's going on.
HLM: Sounds like higher education. Do you see any parallels?
Marcus: When you have entities that don't have to make a profit, where the bureaucracy is not tied to stock prices and profitability, whether it's education or healthcare, it's hard to control.
HLM: Are you suggesting that clinicians are underpaid?
Marcus: No. We are not suggesting that. We just needed a comparison. So we looked at physicians paid at the higher end, orthopedic surgeons, and physicians paid at the lower end, pediatricians, and we looked at nursing staff.
HLM: Your study challenges the ROI for this administrative bloat. Please elaborate.
Marcus: We thought it was important to look at the overall utilization of healthcare in our country. That has been pretty stagnant over the 10 years of our study. So, when you see compensation and costs of nonclinical workers has in some cases doubled over 10 years when the utilization of healthcare in our country hasn’t changed, that is where we start to question the value.
HLM: Does this wage gap affect morale in hospitals?
Marcus: Where it really comes into play is when they say 'we've got to make budget' and then they look for cuts on the lower, assembly line end. People can look at the hospital's 990 and see the C-suite salaries have continued to increase at very high rates.
It's not just the morale of the employees. The increase in healthcare costs in this country has exceeded 17% of our gross domestic product. So, it should maybe hurt the morale of all of us who are patients and taxpayers.
HLM: How would you fix this?
Marcus: The cost of healthcare is so expensive, and at some point it's something we all need. It is important for us to look at every person, particularly the non-clinicians, that are a tax on the healthcare system and analyze how important they are. Does everyone need three deputy administrators?
You have to pressure nonprofit healthcare into looking at what's going on in every department and with every employee to see if the value is there.
HLM: What would be the best use for your findings?
Marcus: I would hope this study calls attention to a lot of the costs within healthcare. It's important for nonprofit boards, who are often volunteers, to get more involved in the finances of healthcare. These boards are fiduciarily responsible for huge expenditures and costs. So, if our study makes people who serve on these not-for-profit boards more aware of what is going on, then we will have done a service.
Mayo 'shocked and deeply saddened by the wholly inaccurate and incomplete reporting' of alleged medical kidnapping. CNN stands by its coverage.
It's been an eventful week for the Mayo Clinic.
On Tuesday, the renowned Rochester, Minnesota–based health system was named the nation's best hospital for the third straight year in the widely read annual rankings from U.S. News & World Report, which includes metrics such as patient experience.
On Wednesday, however, Mayo was the subject of a less-favorable patient experience story in a scathing investigative journalism piece on CNN.
The cable news channel reported that Mayo attempted to "medically kidnap" 18-year-old Alyssa Gilderhus, a high school senior who'd spent two months at the hospital after suffering a ruptured brain aneurism.
The reporting highlights raw video of Mayo staffers grabbing Gilderhus by the arm while she was in a wheelchair and allegedly trying to stop her from leaving the hospital with her family.
"She was truly being held captive," her grandmother, Aimee Olson told CNN. "I would never believe a hospital could do that—never in my wildest dreams."
On Thursday, Mayo went public and called the CNN piece "inaccurate, incomplete and irresponsible reporting."
"A team of Mayo Clinic leaders met with CNN for more than four hours to give them context and share insights to inform their reporting and help them see that there were highly complex and sensitive family dynamics involved in caring for this patient," Chris Gade, chair, Mayo Clinic Department of Public Affairs, said in a media release.
"While we knew the reporter was focused on a pre-determined narrative, the information we provided should have helped them see that their premise was inaccurate. Instead they chose to ignore that information," Gade said. "We were shocked and deeply saddened by the wholly inaccurate and incomplete reporting that was published."
In a letter to Rick Davis, CNN's executive vice president for standards and practices, Gade called Gilderhus's experience "a complex situation involving a vulnerable adult in a suspected abusive family environment."
Gade ticked off a 12-point critique of the reporting that included allegations that CNN contacted patient care staff "with veiled threats and ask(ed) them to breach confidentiality in order to corroborate information."
The magazine's renowned ranking system, now in its 29th year, is ostensibly designed to help patients choose care venues, but much of its importance lives in the eyes of industry insiders.
The U.S. News & World Reportannual hospital rankings continue to be an industry-wide must-read for the hospital sector.
But what do the rankings really mean? Do they matter? That depends on who you are.
While the rankings are purportedly designed to help consumers pick care venues, one researcher says the annual list is far more important to hospital executives than potential patients.
Riba spoke with HealthLeaders Media about the U.S. News rankings, and how to place it in a proper perspective. The following is a lightly edited transcript.
HLM: Why do these rankings continue to be so popular?
Riba: The short answer is the brand. They're known for their rankings, and that U.S. News & World Report seal. It's identifiable and people associate it with rankings, and not just in healthcare but in education, colleges. They've done a brilliant job positioning and branding themselves.
HLM: The rankings target consumers, but seem to get more attention from within the hospital industry.
Riba: The biggest "wows" actually come from within the industry. I work at the University of Michigan. We are ranked No. 5 on the list and U of M was very proud of it, and immediately circulated the news in our internal newsletters. It was up on the website within milliseconds of being released. It's a point of pride. It's a marketing tool for the industry.
HLM: So then, who is served with these rankings?
Riba: This is absolutely meant to be consumer-facing, but what we've learned from the research is that consumers don't really use these rankings to decide where they're going to get care.
Where does their doctor recommend they go because they have that trusted relationship? Family and friends have recommendations too. But overwhelmingly it's geography. People rarely have the ability to go to another part of the state or the country to get this care. U.S. News acknowledges that. It is not realistic to think consumers are going to go to U of M if you're living in Iowa.
HLM: What is the value of these rankings?
Riba: By and large, it is a marker of quality. U.S. News has a rigorous, systematic way that they develop these rankings. As we've also found, with all the different rankings out there, there are a hundred hospitals who can say "We're No. 1" in some area, and that can be confusing. Questions need to be raised about what they're measuring and indicating as "best," and those vary.
HLM: It sounds like you're saying that the rankings' biggest value is as a marketing tool.
Riba: I don’t want to sound cynical, but yes and no. There is some method that indicates a level of quality but it is based on that particular ranking system and how they are defining quality, and that is where it gets confusing for consumers.
Most people don't get into metrics. Most people just want to know "Am I going to go in, and am I going to come out, and am I going to feel OK. Are they not going to kill me?"
In general, all of these rankings are an indicator of some kind of quality, but that varies depending upon who's doing the ranking. And it can give consumers some modicum of comfort knowing they're going to a great hospital. But, there are other things that weigh into the decisions of where to go, and there are lots of things that go into making high-quality care.
HLM: Do hospitals game the rankings?
Riba: I don’t know that I'd call it gamesmanship, but sometimes it is a little like teaching to the test. That's across the board. Anytime you get to performance and quality metrics that say "this is what you're going to be graded on," some organizations are going to put their resources toward achieving that.
Hospitals that teach to the test might put more resources and effort into the patient experience, for example. That's great! We want patients to be happy and have the great experience, but some would argue that's not the best indicator of quality.
HLM: Is there much of a difference between No. 1 and No. 50 hospitals?
Riba: It depends on what's being measured. For example, U of M ranks No. 5 on the U.S. News Honor Roll. IBM Watson also does a ranking. They have different goals and they use publicly available claims data so they are very hard data oriented. U of M doesn't appear in their Top 100. Different criteria, different outcomes.
Saying you're No. 1 is great. It makes people feel good. It provides a marker and indicator of quality. But the quality is based on that specific methodology that the ranking organization has set up. It's really like oranges to apples when you're trying to compare.
HLM: What caveats do you apply when looking at this ranking?
Riba: For a consumer, it's one of many pieces of information you want to consider. The fact that a hospital is ranked in these specialties maybe is a good starting point. But you also want to see what your doctor recommends, and talk to friends and family about their outcomes. Maybe not just rely on one ranking, but use multiple sources to see where you want to go for care.
For hospitals that didn't make it in, it helps them understand where they can improve and it is incumbent on them to determine where they want to put their resources to improve.
For hospitals that win, celebrate a win for your organization. But also it’s not the end all, be all.
The Catholic health system says the decision to sell comes after a yearlong 'thoughtful and deliberate process' to determine the long-term sustainability of the three hospitals.
SSM Health is negotiating with the University of Missouri Health Care and Mosaic Life Care "to explore transferring ownership" of three SSM hospitals in Jefferson City, Maryville, and Mexico, Missouri.
The St. Louis-based, Catholic, not-for-profit health system this week entered exclusive discussions with MU Health to sell its Mid-Missouri hospitals, which include SSM Health St. Mary's Hospital—Jefferson City and SSM Health St. Mary's Hospital—Audrain, with affiliated outpatient, home care, hospice and medical group venues in the region.
SSM Health is also in exclusive discussions with St. Joseph-based Mosaic Life Care to sell SSM Health St. Francis Hospital—Maryville and ancillary services in the northwestern Missouri.
The three health systems have begun a due diligence process that is expected to take several months and the terms of the deals are still being finalized.
SSM said the decision to sell the hospitals came after a yearlong "thoughtful and deliberate process" by the board of trustees, which weighed options to ensure the long-term sustainability of the three hospitals.
"The healthcare industry has shifted dramatically over the past several years," SSM President/CEO Laura S. Kaiser said in amedia release.
"In order to provide safe, high-quality healthcare services that are convenient and affordable, health systems must integrate all points of service across the entire continuum of care."
"Given the close proximity of MU Health Care and Mosaic Life Care’s existing services, we feel this transition of ownership will best serve the people of Jefferson City, Mexico, Maryville and surrounding communities," she said.
MU Health CEO Jonathan Curtright said the two hospital acquisitions in mid-state will create new opportunities to train physicians and other clinicians, while providing care access for patients in underserved rural areas.
"As an academic health system, we will be able to offer these communities improved access to our comprehensive integrated health care services that include the latest treatments and leading-edge research available," he said.
Mosaic Life Care, a member of the Mayo Clinic Care Network, includes three hospitals and more than 60 outpatient locations, urgent care clinics and doctors' offices in Northwest Missouri.
Mosaic CEO Mark Laney, MD, said the health system has pledged to "further expand access to important services needed throughout rural communities in Northwest Missouri–while helping our patients become the healthiest versions of themselves."
The post-acute care provider admitted no wrongdoing, and claimed that 'many' of the allegations 'commenced long before Post Acute acquired the facilities.'
Pennsylvania-based Post Acute Medical, LLC will pay the federal government, Texas and Louisiana $13.1 million to resolve whistleblower allegations that it knowingly paid physicians and other providers illegal kickbacks for referrals, the Department of Justice said.
DOJ alleged that Post Acute had been running the kickback scheme that involved numerous physician-services contracts with its hospitals that started when the post-acute care provider was founded in 2006.
"Although the purpose of these contracts was ostensibly to retain physicians as medical directors or in other administrative or medical roles, the United States alleged that in reality the company’s payments under these contracts were intended to induce the physicians to refer patients to PAM's facilities," DOJ said.
Prosecutors alleged that Post Acute violated the Anti-Kickback Statute and the Stark Law banning self-referrals by using what it called "reciprocal referral relationships” with unaffiliated healthcare providers such as home health companies, billing Medicare and Medicaid for the services.
"In the course of those arrangements, PAM allegedly referred patients to those other providers with the understanding that those providers would refer other patients to PAM’s facilities," DOJ said.
Post Acute posted a statement on its website noting that the payment resolves allegations that first surfaced in 2012, "raising certain issues related to physician relationships in some of the facilities it had previously acquired."
"Although Post Acute disputes that there were any substantive defects with respect to those relationships from a compliance and documentation perspective, many of which commenced long before Post Acute acquired the facilities, in the interest of moving forward and avoiding continued expense, Post Acute agreed to an amicable resolution with the government which it did not acknowledge any violations of applicable rules," Post Acute said.
Prosecutors offered a different perspective.
C.J. Porter, agent in charge for the U.S. Department of Health and Human Services Office of Inspector General, said the "alleged kickbacks and improper physician relationships threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid."
Under the settlement, Post Acute will pay $13,031,502 to the federal government, $114,016 to Texas, and $22,482 to Louisiana. Douglas Johnson, the whistleblower who initiated the federal complaint, will collect $2.3 million as his share of the federal government's recovery.
The health system has also entered into a five-year corporate integrity agreement with the federal government, which Post Acute called "a positive step in continuing its commitment to all regulatory and compliance obligations."
