The newly formed Partnership to Empower Physician-Led Care will use education and advocacy to promote alternative payment models and consumer-directed care.
A group of prestigious medical associations from across the nation have formed an organization to promote value-based care in independent physician practices and speak up on their behalf.
The coalition, launched today, is called the Partnership to Empower Physician-Led Care. Founding members include: Aledade Inc.; the American Academy of Family Physicians; California Medical Association; Florida Medical Association; Medical Group Management Association; Texas Medical Association; and PracticeEdge.
"Independent doctors are often very tied into their communities, working with patients on the frontlines," says Tim Stapleton, CEO of Florida Medical Association. "These are exactly the types of providers who should be the center of the healthcare system of the future."
PEPC Executive Director Kristen McGovern says independent physicians make up 45% of the physician workforce, so it's "impossible to achieve truly value-based care without a robust independent practice community."
"Our goal is to ensure that independent practices are recognized as a vital part of the healthcare system and are given a clear path to continue to contribute to this transformation," McGovern says.
PEPC says it will focus on education and advocacy to urge action on four policy priorities:
Advancing physician-led alternative payment models;
Ensuring an equitable policy framework that promotes choice and provider competition;
Creating new opportunities for physicians in commercial markets such as Medicare Advantage;
Supporting consumer-directed care.
McGovern says other stakeholders often don't realize that independent practices are able to take risk for their patients, or that independent practices can lead alternative payment models like accountable care organizations, often with better results.
She pointed to a report on the Medicare Shared Savings Program which found that 45% of physician-only ACOs earned savings, and that they were more likely to do so than other types of ACOs.
The nonprofit health system's CEO talks about the acquisition of the nation's second-largest post-acute care company and expectations of surging demand for long-term care and home health services.
ProMedica Health System President and CEO Randy Oostra spoke with HealthLeaders Media about the Toledo-based health system's$3.3 billion acquisition of HCR ManorCare in a joint partnership with Welltower, the real estate investment trust.
The following is a lightly edited transcript.
HLM: What makes this a good time to acquire HCR ManorCare?
Oostra: Like most systems, we are looking at the future and all the disruption going on, and you realize a lot of the lines are blurred between what we have traditionally done.
We are in a non-growth market. How do we grow as a system? How do we begin to diversify? We have a health plan, we have hospitals, we have a physician group. Being more diversified in this space made sense.
Then you look at the trends, whether it’s the number of 85-year-olds, or the numbers of people who are going to get Alzheimer's, home health numbers, hospice numbers, etc. You see all this massive growth, but the people moving in that space are venture capital companies.
The more we talked to ManorCare as they were going through their issues, it made a lot of sense. It went from an interesting idea to "why didn’t we do this before?" Plus, they are a locally based company. It gives us scale and opportunities that we hadn't had before.
HLM: Is ProMedica venturing into post-acute care because of the demographics pressures, or because you anticipate a change in the way care is delivered to seniors?
Oostra: It's both. Not many Baby Boomers want to go to a hospital. They want to stay home. Who is going to develop those services? Why wouldn't that be hospitals? The expectations are going to change, so as we delivery these services we are going to have to change as well. It's exciting to think about, this blurring of the lines.
HLM: Did you buy ManorCare because it was bankrupt, or were you looking to move into post-acute services beforehand?
Oostra: We started discussions two or three years ago, before their more recent issues. We did a partnership on one of our campuses here in Sylvania, Ohio. They have a Heartland facility on our Flower hospital campus. We began discussions even back then that maybe we ought to work together and maybe you ought to be a nonprofit. Their initial reaction was "are you people crazy?"
ManorCare is one of the best operators in this space in the country. We think there are opportunities to get more efficient. We think there are ways to get together through telehealth and urgent care through our physician group, maybe exploring some options with our health plan.
Overnight we went from a $3 billion system to a $7 billion system, from 17,000 to 70,000 employees, from facilities in five states to 30 states. We put a lot of emphasis on the skilled nursing piece, but there are other pieces. The home health piece, assisted living, rehab and hospice pieces are incredibly profitable. We have some ideas about how to grow that.
When we look at what we were able to structure on the SNFs with Welltower, the reduction in lease rates, the balance of what we are able to provide with our current system and the growth in other areas, we became comfortable that in a short period of time we can drive that 3% to 4% operating margin on a larger scale, and that is how we got comfortable that this was a great strategic step for us.
HLM: ManorCare was in Chapter 11. What will you do differently to make it profitable?
Oostra: Right now, with everything from sales taxes to real estate taxes, we've done a fair amount of research on how to convert to nonprofit status. We are fairly proximate to one another. In a $7 billion company there are some great opportunities for synergies. Also, the lease rates we will be paying are significantly lower than they were paying in the past. It only takes a couple of those factors to turn them profitable.
In some ways this is not that different as when hospitals merge. You have to look at the same areas, the same management services.
HLM: ManorCare has a significantly larger footprint. How will you coordinate care in outlying facilities that might be several states away from your Ohio base?
Oostra: In some of the states where they have a smaller footprint, maybe we will exit certain markets. In each case we will look at what we can bring that's consistent with our system and in other cases we will partner locally. It's going to be on a one-by-one, market-by-market basis. As we work over the next year those are the things we'll look at.
HLM: What is the status of ManorCare under ProMedica?
Oostra: They are fully part of ProMedica. They will be one of our divisions. They will be our employees. We will own 100% of HCR ManorCare. On the real estate side, we will own 20% of the real estate in a joint venture with Welltower. HCR will be fully integrated in our system.
HLM: Are you in uncharted waters with this acquisition?
Oostra: I hate to say we are in uncharted waters here, but it seems to be a unique, first-of-its-kind partnership. A nonprofit health system, a large post-acute provider and a real estate investment trust as partners is unique.
This is different from other deals we've done where you talk through mission, vision, values and culture and then you come to the business model. This was all about the business model, and it had to work because of where they were with this bankruptcy. It's the opposite of what we’ve done in the past, where you build up to the financial model and that's toward the end. This was first, and this was all about the economic model. Does it work? Can we exit bankruptcy?
But, we know ManorCare and Welltower. We are confident that we will figure out some of the other stuff as we move along.
HLM: With this acquisition, you will more than double in size. Are there any particular areas in this deal that you view as potentially problematic, and what are you doing about it?
Oostra: The fear is the fear of the unknown. We are all at the mercy of reimbursements. I don't think the post-acute world can face further reimbursement cuts, especially when you see what's happened in the past. That's the sort of thing we worry about the most.
We are comfortable that we can operate and grow, unless something further happens to devastate the financials of skilled nursing facilities.
On the other side, the home health, hospice, assisted living, rehab, memory care, those are all more profitable and if we can grow those while managing the skilled nursing at a break even or better margin we are going to be fine.
HLM: What metrics will you use to determine if you're succeeding?
Oostra: Right now we are taking a hard look at quality and safety. We would look at many of the metrics for performance in the nursing home world. We're looking to grow, so financial metrics are important. We talk about balancing out between skilled vs. nonskilled. We will be cognizant in growing in some of the nonskilled areas to balance out the financial portfolio. Those are the first pass metrics.
HLM: Are you nervous about being in the vanguard?
Oostra: We talk a lot in healthcare about how we need to change, how we need to disrupt. But some of the people who would say that would be the first people who will criticize us for doing this. We are in a non-growing market. We have to think nontraditionally.
For most of our careers, once you left the hospital, good luck! We didn't pay attention until it hit our finances and all of a sudden we were worried about readmissions. We look at this as the next step. If we are going to care for all these people beyond our traditional hospital walls, why wouldn't we move into that space? Why wouldn't we do it quicker and why don't we move in even more. It makes sense to us.
A critical access hospital and UPMC affiliate in rural northcentral Pennsylvania settles allegations arising from two self-disclosed Medicare billing irregularities.
Charles Cole Memorial Hospital, a not-for-profit, critical access hospital in Coudersport, Pennsylvania, will pay the federal government $373,547 to settle self-reported irregularities in its Medicare billings.
According to the Department of Justice:
Cole Memorial "failed to bill under a particular modifier to reduce the Medicare reimbursement amount for services provided by physician assistants and nurse practitioners in its pain management, orthopedics, gastroenterology, and medical oncology physician office practices." The alleged infractions occurred between 2007 and 2013.
A second self-disclosure found that Cole Memorial failed to perform face-to-face encounters with some of its Medicare hospice patients prior to the third benefit period recertification and every subsequent benefit period re-certification from 2001 through early 2014.
Cole Memorial has taken corrective action and voluntarily disclosed the violations, and the payment resolves the case without litigation.
The hospital is located about 170 miles northeast of Pittsburgh. The violations occurred and were self-reported before Cole Memorial affiliated with UPMC in March.
The Green Mountain State's legislature became the first in the nation to approve bulk importation of cheaper prescription drugs from Canada. PhRMA calls the bill 'highly irresponsible.'
The Vermont House on Tuesday overwhelmingly passed landmark legislation to allow for the importation of prescription drugs from neighboring Canada.
The bill, S.175, passed the House 141-2 on Tuesday, a day after its unanimous approval in the Senate, and now heads to Republican Gov. Philip Scott.
No one answered the phone at Gov. Scott's office, so it's not clear if he intends to sign the legislation. Local mediaare reporting that Scott has not said if he approves of the bill, which his administration has suggested could create problems with the federal government.
It is against federal law for individuals to import drugs from Canada, but states have been mulling the issue for years.
President Donald Trump, during the campaign, said addressing high drug prices would be a priority of his administration. However, he appointed Health and Human Services SecretaryAlex Azar, the former president of Eli Lilly, who has raised concerns that drug importation could jeopardize public health.
The drug industry has opposed efforts to import drugs from Canada, but they claim to based their opposition on public safety and quality issues related to online purchases, factors that have been largely debunkedby independent analyses.
Pharmaceutical Research and Manufacturers of America (PhRMA) Director of Public Affairs Caitlin A. Carroll blasted the legislation.
"Patient safety must be our top priority, and our public policies should reinforce – not undermine – that commitment," Carroll said. "It is highly irresponsible for Vermont legislators to promote an importation scheme that would create more avenues for counterfeit drugs to enter the country in the middle of an unprecedented opioid crisis."
Carroll said Vermont lawmakers cannot guarantee the authenticity and safety of imported prescription drugs that bypass the FDA approval process, and that the Canadian government does not inspect drugs shipped to this country.
"The burden of combating illicit drugs would fall on local law enforcement officials, who lack the capacity to inspect even a small percentage of increased counterfeit drugs, but who have witnessed their impact in communities across the state," she said.
Vermont Senate President Pro Tem Tim Ashe said the state felt compelled to act in the face of rising, unchecked prescription drug price increases.
“It is outrageous that a commonly used medicine like Lipitor costs 46-times more per pill in the United States than in Canada," Ashe said. "In fact, legislative staff determined that importing just two diabetes drugs from Canada would save the state’s teacher health insurance plan more than $500,000 each year."
The bill is based on the National Academy for State Health Policy's model importation legislation that creates a wholesale importation program to purchase high-cost drugs through authorized wholesalers. The wholesalers will purchase the drugs in Canada and make them available to Vermonters through an existing supply chain that includes local pharmacies.
Across the nation, nine legislatures introduced drug importation bills this year. Utah's legislature asked the governor to develop a proposal similar to Vermont's so the legislature could re-introduce a wholesale importation bill next session.
NASHP Executive Director Trish Riley said states are getting impatient waiting for Congress to address rising drug costs.
"In the absence of federal action to control the cost of prescription drugs, states can’t wait, they need to control drug costs now for all of their citizens," Riley said. "Vermont's legislature has taken an important step in lowering prescription drug prices that we hope will serve Vermonters well and inform the federal policy debate."
The issue of high drug costs could be a factor in the upcoming mid-term elections. Despite President Trump's rhetoric, he has failed to act, and Democratsbelieve they can own the issue, especially if legislation such as Vermont's is challenged by the Trump administration.
Editor's note: This story was updated Wednesday, May 9, to include a comment from PhRMA.
Federal prosecutors accused the three physicians in three states of Stark Act violations involving improper financial relationships with a now-defunct drug testing lab.
Three physicians in three states have separately agreed to settle allegations that they each received improper payments for referrals from a drug testing lab in Pennsylvania, and filed false claims for the services with Medicare, the Department of Justice announced.
The three physicians were identified as: Robert Fetchero, DO, of Jeannette, Pennsylvania; Sridhar Pinnamaneni, MD, of Windermere, Florida; and Thelma Green-Mack, MD, of Zionsville, Indiana. Under the agreement, Fetchero will pay $200,000; Pinnamaneni will pay $370,000; and Green-Mack will pay $130,000, DOJ said.
The settlements follow the guilty plea last year on related charges by John H. Johnson, MD, of Hollidaysburg, Pennsylvania, who had served as medical director at Universal Oral Fluid Laboratories, in Greensburg, Pennsylvania. Johnson, 56, was sentenced to seven years in prison last year for income tax evasion and accepting kickbacks, DOJ said.
According to DOJ, UOFL, which was owned and operated by William Hughes, paid the three physicians to refer their patients to the lab for drug tests; UOFL then submitted claims to Medicare for the drug testing services from 2011 to 2014, a violation of the Stark Law prohibiting self-referrals. Hughes, 70, of Pittsburgh, was indicted earlier this year on related charges, DOJ said.
UOFL has been inactive since March 2014, when federal officials served a search warrant on the premises.
"The integrity of the relationship between patients and their doctors is sacrosanct. A physician’s medical judgment should never be compromised by improper financial incentives," said Scott W. Brady, U.S. Attorney for the Western District of Pennsylvania. "We will continue to hold healthcare providers accountable when they enter into financial arrangements that violate the law."
The acute care hospital opened in 2014 and invested $200 million over the past five years on capital and operational improvements, but will shutter on Thursday after declaring bankruptcy.
Bay Area Regional Medical Center, LLC, a 104-bed, for-profit hospital owned by Medistar Corp., will file for bankruptcy and close on Thursday, less than four years after it opened, the hospital announced on its website.
"It is with a heavy heart that I announce that Bay Area Regional will close its doors on May 10, 2018," Stephen K. Jones, Jr., CEO at Bay Area Regional said.
"We want to thank our staff who worked tirelessly, physicians who chose to practice medicine and patients who received care at our hospital," Jones said.
The Webster, Texas hospital, which describes itself on its website as a "diversified, integrated multi-specialty health care delivery system," notified staff and the more than 400 physicians on its clinical staff of the closure on Friday.
The hospital said it will meet payroll for its 500 employees, and jobs fairs are underway with other hospitals in the area, which is about 25 miles southeast of Houston.
A spokesman for Houston-based Medistar, a medical real estate developer, was not available for comment.
Bay Area Regional opened on July 21, 2014 and the hospital said it invested $200 million over the past five years on capital and operational improvements. Only last year, Bay Area and Medistar announced ambitious plans to double the hospital's capacity and open new ambulatory surgery centers.
Local media report that the hospital was the subject of several lawsuits from health insurance companies and lab services providers alleging mismanagement of funds and breach of contract.
The hospital said it "continues to work with lenders on an orderly closing process, including the payment of Bay Area Regional’s payroll obligations."
The private equity firm, which already owns a 9% stake in Athenahealth, says the takeover is needed to address strategic and operational failures, and an unwillingness by leadership to change course.
Elliott Management has made a cash offer to buy the medical IT company Athenahealth Inc. for $160 per share and take it private in a deal valued at about $7 billion.
In an eight-page letter making the acquisition pitch to Athenahealth leadership, Elliott Partner Jesse Cohn said the Watertown, Massachusetts-based Athenahealth has a history of underperformance both strategically and operationally.
"Unfortunately, we are faced now with the stark reality that Athenahealth as a public-company investment, despite all of its promise, has not worked for many years, is not working today and will not work in the future," Cohn wrote.
"Given Athenahealth's potential, this reality is deeply frustrating, but the fact remains that Athenahealth as a public company has not made the changes necessary to enable it to grow as it should and to create the kind of value its shareholders deserve."
Cohn's letter ticked off a list of grievances that include:
Operating Effectiveness: Athenahealth has long been unable to drive any operating leverage. Despite maintaining a 30% long-term operating margin target for many years, margins for 2017 were just 14%, well below the company’s peers and still down from 2011 margins of 17%, when the company was one-quarter its current size and lacked the benefit of scale. Recently, the company took steps to improve margins to 16-17% for 2018 (based on guidance), but the company appears to be struggling with execution of this plan.
Product Execution: Operating issues go well beyond efficiency, as Athenahealth's streamlined introduction was a significant and disappointing step backward that led to years of (Net Promotor Score) declines. Similar issues have plagued other Athenahealth offerings such as its inpatient solution and Epocrates.
Strategy Execution: Athenahealth has a publicly described grand vision, but has repeatedly failed to execute. Inpatient is a prime example, where the company has been unable to deliver consistent quality of service in order to promote the adoption of a product that is otherwise disruptive.
Forecasting: Despite years of promises, athenahealth does not achieve what it sets out to. The company repeatedly misses its targets: its long-held 30% operating margin target, 21% growth in 2017, $400–$450 million of bookings in 2017, 30% bookings growth in 2016, 100 hospital implementations in 2017, and many, many more examples.
Guidance: Athenahealth's team has shown that it lacks visibility into its business performance. The Company has repeatedly set and failed to achieve its targets, including twice cutting (and yet still missing) its 2017 bookings guidance. The board, being forced to rely on these figures, cannot grade the business. Shareholders are left to suffer, with regular 10%–20% declines in the company's stock price on earnings announcements. Prior to the disclosure of Elliott’s position last year, athenahealth was by far the most heavily shorted U.S. company above $2 billion in the software, services and healthcare IT universe.
In a media release, Athenahealth acknowledged the buyout offer but said little else.
"Consistent with its fiduciary duties and following consultation with its independent financial and legal advisors, the Athenahealth board of directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the company and Athenahealth shareholders. Athenahealth shareholders do not need to take any action at this time," the statement read.
According to CNBC, the proposal is a 27% premium to Athenahealth's share price. The shares jumped nearly 24% in trading on Monday after CNBC reported that Elliott was preparing to make the bid.
Athenahealth's CEO is Jonathan Bush, the cousin of former President George W. Bush.
Federal prosecutors say the New York City-based urgent care chain admitted that it charged Medicare for more expensive procedures, and billed the federal government for services provided by uncredentialed physicians.
CityMD, a chain of 88 urgent care centers in the New York City area, will pay $6.6 million to settle False Claims Act allegations brought forward in a whistleblower lawsuit, the Department of Justice announced.
Federal prosecutors in New York said that CityMD billed Medicare for services that physicians did not perform, and billed Medicare for more expensive and complex services than were actually provided to patients.
CityMD admitted and accepted responsibility for its conduct in U.S. District Court in Manhattan this week, and agreed to pay $6,606,251.40 in damages, DOJ said, adding that the urgent care company "cooperated fully with this investigation."
"CityMD improperly billed Medicare at significant cost to taxpayers," Manhattan U.S. Attorney Geoffrey S. Berman said. "This settlement holds CityMD accountable both through the significant monetary payment and the detailed admissions made by CityMD."
As part of the settlement, CityMD admitted responsibility for the following conduct:
CityMD billed Medicare for lengthier and/or more complex services or procedures than the services or procedures it actually provided to patients or that were supported with documentation in the medical records.
CityMD employed a number of physicians who were not credentialed with the Medicare program at the time CityMD billed Medicare for their services.
CityMD falsely billed Medicare for services rendered by these uncredentialed physicians using the National Provider Identification numbers of other credentialed physicians who did not actually render the services in question.
The federal government joined a private whistleblower lawsuit that had been filed under seal.
CityMD issued the following statement Friday afternoon:
"CityMD is pleased to have reached a satisfactory resolution to this matter, which involved past insurance billing and coding. This matter was unrelated to CityMD's patient care, which has consistently been of the highest quality."
"Throughout CityMD's history, and especially over the past year, we have made substantial investments in strengthening our compliance program, which has included the enhancement and implementation of detailed compliance policies and procedures and the appointment of a new, full-time chief compliance officer."
"We earn the trust of the communities we serve by providing an exceptional experience through high-quality medical care and convenient access, and that includes ensuring everyone at CityMD understands that they are an integral part of our business and adheres to best-in-class compliance practices."
A national survey finds that most academic research facilities were not in compliance with more vigorous, HHS-mandated clinical registration and reporting requirements.
Most academic medical centers and other institutions have been slow to adopt new, stricter federal requirements for clinical trial registration and reporting, a new study shows.
Johns Hopkins Bloomberg School of Public Health researchers obtained survey data from more than 350 academic institutions across the nation that conduct clinical trials. They found that relatively few had the staff or policies needed to comply with the new requirements put forward by the Department of Health and Human Services and National Institutes of Health.
"For many organizations, it seems that their leaders have not taken the necessary steps towards compliance," says study lead author Evan Mayo-Wilson, assistant scientist in the Department of Epidemiology at the Bloomberg School.
"If we want scientists to share their research, then academic institutions need to create systems in which it is expected and easy for individual scientists to do the right thing," Mayo-Wilson said.
Among these 366 organizations that responded to the survey:
43% had a policy on clinical trial registration and 35% had a policy on the reporting of trial results.
Of those with policies, few allowed organizations to punish investigators who failed to register trials or report results—and only one responding organization had ever punished a researcher for non-compliance.
The responders allocated almost no staff time to ClinicalTrials.gov registration and reporting requirements: The median full-time staff equivalent was just 0.08, implying a single employee was assigned to devote just 8% of her time—a few hours per week—to regulatory compliance.
Inadequate reporting also violates the promise made to trial participants: that the study will help other patients and advance medical knowledge. "If we don't share results, then we’re essentially lying to the people who volunteer for clinical research," Mayo-Wilson says.
The Food and Drug Administration Amendments Act of 2007 requires that sponsors register and report results for many clinical trials. A subsequent final rule expanded these requirements and took effect in April 2017. A complementary NIH policy took effect in January 2018.
The researchers say the findings may represent a best case scenario because the institutions that did not respond are less likely to be in compliance.
Daniel Ford, MD, vice dean for clinical investigation at the Johns Hopkins School of Medicine, said the NIH and the National Library of Medicine could make it easier to comply with the new policies.
"It is the government's responsibility to minimize burden and to ensure that the system is suitable for all the trials that are now required to register and report their results," he said.
The new partners look to improve financial and operating outcomes with an alternative supply chain source for independent providers in North America, Asia, Oceania, and Europe.
Ascension and Australia's Ramsay Health Care Ltd. are forming a global supply chain joint venture.
The deal will combine the purchasing power of St. Louis-based Ascension, the world's largest Catholic health system, and Sydney-based Ramsay, which operates more than 230 healthcare facilities in six countries on four continents, the two organizations said in a joint statement.
"Ascension is continually exploring potential opportunities to extend our reach internationally and make healthcare more affordable for those we serve," said Ascension President and CEO Anthony R. Tersigni.
"As we looked for partners to help us improve the quality and reduce the costs of the millions of items our caregivers use to provide compassionate, personalized care, we were tremendously impressed by Ramsay Health Care, whose values and mission align closely with our own," he said.
The venture will be owned equally by Ascension and Ramsay. Ascension subsidiaries Ascension Holdings International and The Resource Group, Ascension’s group purchasing organization, will work with Ramsay's International Procurement Office to develop and operationalize the new global healthcare buying group.
Ramsay Group Managing Director and CEO Craig McNally said the JV "will seek products internationally that are able to deliver the high level of service and clinical outcomes that our patients have come to expect."
"Globally, funders are looking for better outcomes at a reduced cost and it is important that all players in the healthcare system work to meet these expectations," McNally said. "At the same time, technology is advancing rapidly and we owe it to our patients to stay abreast of new developments."
John D. Doyle, president and CEO of Ascension Holdings International, said the JV "will create opportunities to both improve financial and operating performance within our respective organizations, as well as providing an alternative supply chain source for independent providers in North America, Asia, Oceania, and Europe."
"The new venture is designed by providers, for providers, with the belief that we can bring greater efficiency, discipline, and innovation to the system, and form more productive relationships with the vendor community," Doyle said.
