The new, unnamed entity to be created by the merger of Wellmont Health System and Mountain States Health Alliance will be led by executives from both organizations. In other news, the FTC has issued the latest, and perhaps the final, shot in a three-year legal battle between itself and Phoebe Putney Health System.

Wellmont Health System and Mountain States Health Alliance announced plans to merge and create an integrated, locally governed healthcare network targeting health issues affecting people living in a four-state slice of Appalachia.

The boards of directors for both health systems last week unanimously approved an exclusive agreement to explore the merger. The decision caps more than a year of merger discussions by the two health systems, both of which are headquartered in Upper East Tennessee.

"Northeast Tennessee and Southwest Virginia disproportionately suffer from serious health issues—cardiovascular disease, diabetes, addiction, and access to mental health services, to name a few—and they must be addressed," said Alan Levine, president and CEO of Mountain States, who would become executive chairman and president of the combined system.

"The cost of this poor health is not sustainable," Levine said in prepared remarks. "By integrating, we can refocus our efforts from being measured based on how many patients we can admit to the hospital and how many ways we can duplicate these efforts, to how we measurably improve the health of our region while eliminating unnecessary costs and making healthcare more affordable. The people of this region deserve nothing less. We intend to demonstrate the merger's substantial specific potential in these areas."

Under the proposal, a new board would be created, have equal representation from both systems, and an additional two independent, jointly appointed members. The board will include a lead independent director who will be a Wellmont board appointee tasked with coordinating work with the executive chairman.

The president of East Tennessee State University will be a non-voting member of the board. ETSU will collaborate with the new system and focus on expanding opportunities to compete for research investment in the region, and bolster physician and allied health training.

The new board would direct the health system, which will get a new name, which has yet to be determined. One leadership team, composed of current executives from both organizations, would lead the combined system. The CEOs of both organizations would share leadership responsibilities.

"Together, we'll work alongside our employed and independent physicians to shape the future of healthcare by modeling effective clinical collaboration, building new community health solutions and becoming a national model for rural healthcare delivery," said Bart Hove, president and CEO of Wellmont, who would be CEO of the new system.

"As one system, our physicians would share best practices, collaborate to benchmark our outcomes against the nation's best, and develop new high-level services closer to home."

With the negotiating agreement signed, the two systems will now work to clear regulatory hurdles in Virginia and Tennessee, a process that is expected to be completed by the end of the year.

Based in Kingsport, TN, Wellmont Health System operates in Northeast Tennessee and Southwest Virginia.

Mountain States provides care in Northeast Tennessee, Southwest Virginia, Southeastern Kentucky and Western North Carolina. The not-for-profit system is based in Johnson City, TN, operates 13 hospitals serving a 29-county region.

FTC, Phoebe Putney Finalize Antitrust Settlement
The Federal Trade Commission has reached a settlement in its longstanding and complex dispute with Phoebe Putney Health System, Inc. that will allow the Albany, GA-based provider to keep Palmyra Park Hospital, even though the deal creates a hospital monopoly in the region.

"While we continue to have reason to believe that Phoebe Putney's acquisition of Palmyra violated Section 7 of the Clayton Act and Section 5 of the FTC Act, any relief attempting to restore the competition lost as a result of the merger is precluded by Georgia's strict Certificate of Need requirements," the Commission wrote in a statement.

This week's announcement represents the latest, and perhaps the final, shot in a three-year legal battle between the FTC and Phoebe Putney that went all the way to the U.S. Supreme Court.

The FTC alleged that Phoebe Putney constructed an elaborate scheme that used the Hospital Authority of Albany-Dougherty County, GA as a "straw man" to "cloak private, anticompetitive activity in governmental guise in the hopes that it would exempt the acquisition from federal antitrust law" in the purchase of Palmyra Park Hospital from HCA.

In 2011 a federal district judge ruled that the PPHS was immune from federal antitrust liability under the FTC Act and the Clayton Act. The FTC appealed the ruling to the 11th Circuit Court of Appeals but lost again.

In 2013, however, the U.S. Supreme Court ruled that the appeals court had "loosely" interpreted a state law cited by Phoebe Putney to justify a merger that would give the consolidated health system control of about 85% of the market in the region. The high court reversed the appeals court ruling and sent the case back to federal district court.

Under the consent agreement with the FTC, Phoebe Putney and the Hospital Authority must notify the FTC in advance of acquiring any part of a hospital or a controlling interest in other healthcare providers in the Albany, Georgia area for the next 10 years, and will be prohibited from objecting to regulatory applications made by potential new hospital providers in the same area for up to five years.

Jay L. Levine, a Washington, DC-based antitrust lawyer with Porter Wright Morris & Arthur LLP, says the FTC agreement this month "Is effectively the same agreement they put out before for public comment."

"They never gave final approval previously because they received word that the Georgia CON laws may not preclude a divestiture," Levine said by email.

"Recently, though, it became clear that the CON laws would preclude a divestiture and hence they moved forward with the agreement. It prohibits Phoebe Putney from objecting to others' CONs, from acquiring assets without giving notice to the FTC and it requires the parties to stipulate that the transaction was anticompetitive, which has implications should consumers of healthcare in that area decide to sue, claiming their healthcare costs were larger than they would have been absent the merger."

Robinson Health System Joins UH
Ravenna, OH-based Robinson Health System will join University Hospitals, the two Northeastern Ohio health systems announced jointly.

"Without question the agreement with University Hospitals will further strengthen Robinson and help us fulfill our mission to provide high-quality patient-centered health care to our patients and the communities that we serve," Robinson Health President and CEO Stephen Colecchi said in prepared remarks.

Robinson Health to Pay $10M to Settle Kickback Allegations

"UH also has an outstanding record of employee and medical staff engagement," Colecchi said. "We are confident that becoming part of UH will be a dynamic and important change for Robinson and is in the best interests of our patients, the Portage County community, our employees and medical staff. UH is consistently recognized as one of the leading health systems in the country and we are very proud and excited to become part of the UH system."

The financial details were not immediately disclosed, but the deal is expected to be finalized this year.

Thomas F. Zenty III, CEO of Cleveland-based UH, said the acquisition of Robinson Health "affirms our shared conviction that together we will best serve the residents of Portage County and surrounding communities."

Robinson Health System includes the flagship 117-bed Robinson Memorial Hospital, with nearly 400 physicians on staff covering more than 40 specialties. Robinson also operates an urgent care center, imaging facilities, a network of physician practices, and outpatient centers and medical facilities throughout Portage County.

UH employs 25,000 Ohio residents and is the second-largest employer in Northeast Ohio. The health system is an integrated network of 15 hospitals, including its relationships with Southwest General Health Center and St. John Medical Center, and 29 outpatient health centers located in 15 counties throughout the Northeast Ohio region.

News of the acquisition came on the heels of an announcement that Robinson had agreed to pay $10 million to the federal government to resolve self-disclosed claims that it paid illegal kickbacks to physicians referring Medicare patients.

Five hospitals in northern Maine have formed a collaborative alliance to improve healthcare access and outcomes and to generate savings. The arrangement allows each hospital to maintain some level of autonomy.

Has the term "independent hospital" become an anachronism?

I suspect not, or at least not yet.

There are still plenty of hospitals out there, particularly in rural areas, which are not formally part of a health system, and that maintain a local board of trustees and executive suite for strategic planning and budgeting. These hospitals are a growing rarity.

The Community and Rural beat at HealthLeaders Media has allowed me to interview dozens of rural hospital leaders over the years. To a person, these leaders tend to be feisty, independent, problem-solvers who greatly value local control of their healthcare.

It's a matter of pride born from necessity. They've had to learn to make do with what they have, and they often justifiably believe that no one better understands the healthcare needs of the communities they serve.

To a person, however, these executives all say it's getting harder, if not impossible, to go it alone. I cannot recall speaking to a hospital leader who was not looking for some sort of affiliation, whether an outright acquisition by a larger hospital or health system, or some sort of looser affiliation to pool resources and improve leverage with vendors and payers.

Last month, for example, five hospitals in northern Maine formed the Maine Rural Health Collaborative, LLCto improve healthcare access and outcomes and to generate savings. At the same time, the arrangement allows each hospital to maintain some level of autonomy. The five hospitals are:

• Northern Maine Medical Center in Fort Kent
• Cary Medical Center in Caribou
• Houlton Regional Hospital in Houlton
• St. Joseph Hospital in Bangor
• Mount Desert Island Hospital in Bar Harbor

Houlton and Mount Desert Island are critical access hospitals. Every hospital has an equal vote, and all decisions by the collaborative must be unanimous.

Tom Moakler, CEO at Houlton Regional Hospital, summed up the need for the collaborative when the project was announced March 12.

"The advent of the Affordable Care Act, changes in reimbursement, and a number of other complex issues are reshaping the landscape for hospitals and other healthcare providers across the nation," Moakler said.

"Our hospitals here in Maine are coping with these changes while facing unique challenges in providing healthcare to a rapidly aging and low income population, particularly in rural parts of the state. By working together in a collaborative fashion we can all benefit from each other's experience, standardize best practices and protect quality, accessible care."

An Opportunity to Reduce Expenses
What's happening now in Maine is not a new idea. Hospitals in Georgia, New Hampshire, Illinois and other rural states have formed collaboratives and the Maine providers will be taking notes from those projects.

Peggy Pinkham, RN, executive director—and the only employee—at the Maine Rural Health Collaborative, says the first item on the agenda will be the search for opportunities to reduce expenses in areas that are not directly related to patient care.

"Some of the examples could be what collection agencies are the members using and is there an opportunity to negotiate a better rate with five hospitals versus one," she says. "There are opportunities to identify revenue cycle initiatives, reduce the number of denials that hospitals experience by discussing what best practices the hospitals are using."

Employee benefits are another area identified for potential savings or efficiencies by the five hospitals.

"We aren't into health insurance now, but things like disability and long-term life. Again, using one vendor versus potentially five," Pinkham says. "So, it's looking at those types of things that could be more cost-effective as a group, versus individually."

Healthcare IT is also on the radar.

"That is something we will always be looking at," she says. "We are going to start collecting that data this year at least so we have an inventory of what everybody is using and where they are using it."

In the future, Pinkham envisions the collaborative "moving into some clinical arena, which would be a bit more challenging, as well as looking at opportunities perhaps for grant funding. Obviously the goal is how can we stay connected to our communities, provide the best service possible, and be as efficient and effective as we can be."

It's probably a safe bet that this collaborative will gain new members once it demonstrates success.

"I am sure people will be keeping tabs on how the collaborative works, some of the results they will achieve, and they might consider whether that would work for them," Pinkham says.

When you look at the challenges that rural providers face providing care for an older, sicker, poorer population, collaboratives such as Maine Rural Health could mean the difference between shuttering and continuing to provide care.

Independent hospitals are not an anachronism. They're adapting to a new reality, and the understanding that maintaining independence in this evolving healthcare landscape is going to require a group effort.

The fact that nine out of 10 emergency physicians admit to ordering medically unnecessary tests indicates that existing protocols and safeguards to prevent overuse clearly aren't working, survey results suggests.

Nearly all of the 435 emergency physicians in a recent survey admitted to ordering too many diagnostic tests, but said they did so out of fear of error, uncertainty, and non-medical reasons.

The survey, published this month in Academic Emergency Medicine, focused specifically on the use, and over-use, of imaging tests. More than 85% of the respondents said they believe that too many tests are ordered in their own departments, and 97% admitted they ordered "medically unnecessary" radiology tests, which were defined as imaging the physician ordered in response to external pressures and not for optimal medical care.

"I am not surprised by the findings," says Hemal Kanzaria, MD, the lead author of the study, and an emergency physician practicing at UCLA Ronald Reagan Medical Center, and VA West Los Angeles Medical Center. "I face these issues every time I work in the emergency department and I agree with the collective response from my colleagues that there are many aspects of the practice environment that drive over-diagnoses."

"A lot of what I heard from our survey respondents regarding a fear of being wrong, or missing a low-probability, but potentially life-threatening diagnosis resonates with my own clinical practice, says Kanzaria, who is also a clinical scholar with the Robert Wood Johnson Foundation, which funded the study with the Department of Veterans Affairs.

The fact that nearly every emergency physician admits to ordering medically unnecessary tests indicates that existing protocols and safeguards to prevent overuse clearly aren't working, survey results suggests.

"Overall, I interpret our results to suggest that over-testing is not due to physicians' lack of knowledge or lack of insight or poor medical judgment, but reflects a cultural response both within and outside medicine to uncertainty and error," Kanzaria says.

"I personally think that to overcome over-testing we need to address our collective intolerance of uncertainty both within medicine and within society at large as well as this culture of blame that triggers the malpractice system."

When asked how they'd address the problem, the physicians in the survey suggested several approaches including tort reform, increased adoption of shared decision-making with patients, feedback to physicians on test-ordering metrics, and improved training on diagnostic testing.

"There is not one magic bullet. I don't think that any isolated approach to curbing over-imaging exists," Kanzaria says. "There is one idea that is being discussed right now, the idea of safe harbors. Using clinical practice guidelines to determine the local standard of care might help physicians follow both evidence based guidelines and offer some protections from malpractice and could potentially result in fewer medically unnecessary tests."

More feedback on test orders and behavior also would give emergency physicians a better sense of where they stand in relation to their colleagues. "This type of benchmark does not get at appropriateness, but it still would begin a discussion about use and overuse," Kanzaria says.
Another big driver for imaging overuse is pressure from patients, who are often arrive at the emergency department in pain, afraid, and with unrealistic expectations.

"The first step is recognizing for yourself and your patients that uncertainty exists and that we might not figure out the answer today, and acknowledging that there are potential harms and benefits with every test," Kanzaria says.

"Acknowledging that uncertainty exists both for the physicians and for their patients may be a good first step," he says. "Beyond that, addressing our low tolerance for uncertainty on the part of physicians and patients will really require addressing a number of widespread beliefs that are held in society, including the perception that error is the cause of any bad outcome, or that technology can solve all of our problems, or that catching things early is always beneficial. Myths like that we will have to address."

The bill also delays until Sept. 30 changes in the two-midnight rule on inpatient billing that were set to take effect at the end of this month.

The House on Tuesday unveiled a bipartisan proposal to permanently fix the Sustainable Growth Rate funding formula and transition Medicare toward value-based payments.

"This package is the best opportunity to turn the page on years of short-term fixes so that we can finally make the reforms we need to strengthen Medicare for our seniors," Ways and Means Committee Chairman Paul Ryan, (R-WI), said in remarks accompanying the bill.

"This is real patient-centered reform—done in a bipartisan way—and I urge all of my colleagues to support it."

The much maligned SGR is a budget cap put in place by Congress in 1997 to control Medicare cost growth. It never worked, but rather than permanently fix the problem Congress has instead spent $150 billion in 17 short-term fixes since 2003. The most recent patch is scheduled to expire on March 21, which would leave physicians with a 21% cut in Medicare payments.

This latest permanent fix proposal builds upon HR1470, which earlier this month garnered support in the House Energy & Commerce and Ways & Means Committees, and by the Senate Finance Committee. According to a "working framework" released by the House Energy & Commerce Committee, the bill would:

• Repeal SGR and replace it with HR1470, a bipartisan, bicameral agreement that also transitions Medicare to a value-based payment scheme.
• Provide 0.5% annual increases to Medicare payments for the next five years to provide a period of stability.
• Delay disproportionate share payment cuts to safety net hospitals until 2018 and extend the DSH policy through 2025.
• Delay until Sept. 30 changes in the two-midnight rule on inpatient billing that were set to take effect at the end of this month.
• Fully fund the Children's Health Insurance program through Sept. 30, 2017.
• Preserve all extenders included in 2014's temporary SGR patch, including addition to funding for Community Health Centers through 2017.
• Provide a 5% bonus to providers who receive a significant portion of their revenue from an alternative payment model or patient centered medical home.
• Permanently extend Medicare's Qualifying Individual program for low-income seniors, and the Transitional Medical Assistance program that helps families on Medicaid keep their coverage as they transition from welfare to work.

Repeal of the SGR and other provisions in the bill are expected to cost anywhere from $175 billion to $200 billion over 10 years and it's not clear where all of that money would come from in a Congress that is locked down against tax increases.

The House bill provides "offsets " for means testing for Medicare recipients that could generate some savings. For example, starting in 2018, the premiums would increase from 50% to 65% for Part B and D beneficiaries who earn between $133,500 and $160,000 ($267,000 − $320,000 for a couple). For those in higher income brackets, the premiums would increase from 65% to 75%.

The plan also calls for limits on first dollar coverage for some Medigap plans, starting in 2020. The IRS would also be authorized to impose levies of up to 100% on tax delinquent Medicare providers. Currently, the maximum levy is 30%.

In addition, Medicare reimbursements would be increased by no more than 1% in 2018 for post-acute care providers.

The total dollar value of the offsets was not clear.

It's also not clear if the bill has the support of Senate Democrats, who support the repeal of the SGR, but who said they cannot "guarantee" their support for the proposal unless it includes four years of additional funding for CHIP.