Community Health Systems, Inc. continues its ongoing efforts to reduce debt with the sale of a community hospital in Oklahoma City. It's CHS's eighth hospital divestiture this year.
Financial terms were not disclosed. The sale was one of several planned divestitures discussed by CHS this spring in a first quarter earnings call.
Deaconess, a 291-bed community hospital, operates under CHS' affiliated AllianceHealth brand name in Oklahoma and the purchase does not include other AllianceHealth hospitals in the state. When the sale is finalized, CHS affiliates will operate seven hospitals in Oklahoma.
Tim Johnson, president of nearby INTEGRIS Baptist Medical Center, told The Oklahoman newspaper that Baptist has to turn away about 1,200 patients each year because of a shortage of critical care beds.
"What we really need is more critical care space," Johnson told the newspaper. "It really gives us some breathing room."
INTEGRIS said no layoffs are planned at Deaconess.
Franklin, Tennessee-based CHS has sold eight hospitals this year in its ongoing effort to reduce its debts that accrued after its $7.6 billion acquisition of Health Management Associates, Inc. in 2013.
The company reported a nearly 18% drop in net revenuesand a 21% drop in total admissions in the first quarter of 2018.
On June 1, CHS sold the 85-bed Tennova Healthcare – Jamestown in Jamestown, Tennessee, to West Palm Beach, Florida-based Rennova Health, Inc., which had been delisted from Nasdaqearlier this year for excessive stock splitting
The various iterations of the travel ban—which mostly target Muslim-majority nations—have been highly contentious among healthcare providers, many of whom worry it will worsen access to care.
The U.S. Supreme Court on Tuesday affirmed President Donald Trump's authority to restrict foreign nationals from entering the country, upholding a controversial ban on travelers from seven countries.
Some fear the ban, which applies mostly to Muslim-majority nations, could worsen an already-critical shortage of healthcare workers in the United States.
“We are deeply disappointed in the Court’s decision," Association of American Medical Colleges President and CEO Darrell G. Kirch, MD, said in a statement released shortly after the 5-4 ruling.
The AAMC had filed an amicus brief with the high court challenging a series of executive actions over the past 18 months that imposed nationality-based exclusions, asserting that the actions would worsen the nation's health-professions shortage and impair its ability to advance medicine and protect public health.
With the court's ruling that this proclamation is within the president's legal discretion, the debate now shifts to Congress, Kirch said.
"The AAMC will continue its efforts to educate legislators about the direct link between fair immigration policies and the health of Americans, and to advocate for immigration policies that recognize the critical role that health professionals from other countries play in safeguarding our nation’s health security,” he said.
The various iterations of the travel ban have been highly contentious among healthcare providers, many of whom believe it will only worsen access to healthcare in underserved areas, especially in rural America:
When the first ban attempt was announced in early 2017 shortly after Trump took office, the Migration Policy Institute noted that more than 22% of all healthcare workers were immigrants, and 28% of those healthcare workers were surgeons or physicians.
It's not clear how or if the travel ban will affect the Conrad 30 J-1 visa waiver, which allows international medical students to stay in the United States after residency for three years if they work in a rural or urban community where there is a physician shortage.
By some estimates, the Conrad 30 J-1 Visa Waiver by itself has brought nearly 10,000 physicians into rural and urban underserved communities over the past 10 years.
The American College of Physicians, which filed an amicus brief of its own opposing Trump's travel ban, released a statement Tuesday reiterating its disappointment.
"We urge the administration and Congress to affirm the paramount importance of non-discrimination against any person based on religion, ethnicity, gender, gender identity, and sexual orientation in all decisions relating to immigration policy, and particularly, to undo the harm to patients, the [international medical graduates] who treat them, and to medical education that will result from the President’s Executive Office and the Supreme Court’s decision to uphold it," ACP President Ana María López, MD, MPH, FACP, said.
The Knoxville-based, for-profit hospice chain says it disputes the allegations brought out in a whistleblower lawsuit, but settled the case to avoid costly litigation.
Caris Healthcare, LLC will pay $8.5 million to settle false claims allegations that it knowingly kept overpayments for patients who were ineligible for Medicare hospital benefits because they were not terminally ill, theDepartment of Justice said.
A federal complaint alleged that the Knoxville-based, for-profit hospice chain admitted patients whose medical records showed did not have terminal illness as part of an effort to meet the aggressive admissions and census targets set by the company.
The complaint also alleged that Caris' leadership was made aware of the overpayments, but ignored internal audits and warnings from staff.
"Caris not only continued to submit hospice claims to Medicare for the patients, but also took no meaningful action to determine whether it had previously received improper payments for these and other patients that should have been returned to Medicare," DOJ said.
"Today's settlement is an important reminder that compliance programs and activities cannot exist in name only," Acting Assistant Attorney General Chad A. Readler of DOJ's Civil Division said in a media release.
"When a healthcare provider is put on notice that a patient is ineligible for a particular Medicare benefit or service, the healthcare provider cannot turn a blind eye to that information but, instead, must take reasonable steps to stop the improper conduct and to determine whether that conduct resulted in prior overpayments," Readler said.
Caris, which operates 28 offices in Tennessee, Virginia, Missouri, South Carolina and Georgia, disputed the allegations brought out in a whistleblower lawsuit, but settled the case to avoid costly litigation.
"In recent years, litigation involving hospice providers has increasingly focused on the eligibility of patients to receive hospice services and often amounts to a second-guessing of the care provided to those patients, years after the fact," Caris said in a statement to the media.
"The settlement of the lawsuit brought under the False Claims Act (FCA) resolves these very sorts of allegations regarding care provided by Caris to a small fraction of patients between 2010 and 2013."
Caris Healthcare founder and board member Norman McRae said the hospice provider "has the utmost confidence in its processes for determining patient eligibility for hospice and in the clinical judgment of those within our company on the frontlines of providing care to our patients."
The settlement resolves allegations filed in a whistleblower lawsuit by a registered nurse who was a former employee at Caris Healthcare. The whistleblower will get $1.4 million of the settlement.
The downsizing over the next 18 months is expected to reduce debts by $25 billion, and comes as the storied company falls off the Dow Jones Industrial Average for the first time in 110 years.
GE announced Tuesday it would separate GE Healthcare into a standalone company and use the proceeds from the sale to pay down its debts.
Untangling the healthcare subsidiary from a conglomerate at this scale would generally take two years or longer, so GE's 18-month timeline is aggressive, said Brad Haller, managing director in M&A practice for the consulting firm West Monroe Partners.
The spinoff decision could offer an opportunity for the separate entity to funnel its energy into the most promising areas in which GE Healthcare currently operates, Haller said.
"The laboratory supplies business in particular is a crowded market, but as a standalone business we would expect the new company to focus its R&D efforts on supplies for the burgeoning genomics field," he added.
As part of a restructuring, the storied company said it would also sell its stake in the oil and gas company Baker Hughes and refocus on core high-tech areas of aviation, power, and renewable energy;
The strategy is expected to reduced debt by $25 billion, and create a "leaner corporate structure" with $500 million in savings by the end of 2020, GE said in a media release.
GE said it expects to generate cash from the disposition of approximately 20% of its interest in the GE Healthcare business and to distribute the remaining 80% to GE shareholders.
Today's announcement came on the first day in 110 years that GE was not on the Dow Jones Industrial Average, CNN reports. It was replaced by Walgreens Boots Alliance in the elite 30-stock index Tuesday.
GE Healthcare generated more than $19 billion in revenues in 2017 and posted 5% revenue growth and 9% segment profit growth, and accounted for 16% of the company's total sales.
GE has seen its stock value drop precipitously in the past year. However, GE shares jumped 6.4% to $13.57 in early trading Tuesday.
S&P Global Ratings responded to the news by placing GE's "A" long-term rating on CreditWatch with "negative implications."
"GE's divestiture of its core healthcare segment leaves the company with less business diversity, earnings and cash flow and as such, potential for heightened volatility in profits and cash flow. However, debt reduction and substantial cash balances will reduce balance sheet risk," S&P said.
John Flannery, chairman and CEO of GE, said in a media release that the spin-offs would "improve our operations and balance sheet as we make GE simpler and stronger."
"Today's actions unlock both a pure-play healthcare company and a tier-one oil and gas servicing and equipment player," Flannery said.
"We are confident that positioning GE Healthcare and BHGE outside of GE's current structure is best not only for GE and its owners, but also for these businesses, which will strengthen their market-leading positions and enhance their ability to invest for the future, while carrying the spirit of GE forward," he said.
Kieran Murphy, president and CEO of GE Healthcare, will continue to lead the standalone company under the GE brand.
"As an independent global healthcare business, we will have greater flexibility to pursue future growth opportunities, react quickly to changes in the industry and invest in innovation," Murphy said.
"We will build on strong customer demand for integrated precision health solutions and great technology with digital and analytics capabilities as we enter our next chapter,” he said.
GE Healthcare's core business is medical imaging, monitoring, and other high-tech hospital equipment. The company does business in 140 countries.
The sell-offs are expected to be completed over the next 12 to 18 months.
The widely read list identifies what it says are the top pediatric hospitals that deliver high-quality care across multiple specialties.
Boston Children's Hospital once again tops U.S. News and World Report's Honor Roll of the nation's Best Children's Hospitals, on a list that, for the most part, has held steady from previous years.
This year's rankings name the top 50 centers in each of 10 pediatric specialties: cancer, cardiology and heart surgery, diabetes and endocrinology, gastroenterology and gastrointestinal surgery, neonatology, nephrology, neurology and neurosurgery, orthopedics, pulmonology, and urology.
The Best Children's Hospitalsmethodology factors measures such as patient outcomes, including mortality and infection rates, as well as available clinical resources and compliance with best practices, U.S. News said.
The magazine said it used RTI International, a North Carolina-based research and consulting firm, to collect and analyze data from children's hospitals and surveyed thousands of pediatric specialists.
More than 4 million people have lost coverage in the past two years, including many lower-income adults. That could prove problematic for safety net hospitals in the near future.
The ongoing efforts to destabilize the Affordable Care Act will adversely affect the operating margins of not-for-profit healthcare providers, according to a new analysis from S&P Global.
S&P analyst Allison Bretz said that over time, "a growing uninsured population could be a credit negative for not-for-profit hospitals and health systems, as these facilities would likely see an uptick in self-pay patients, charity care and bad debt."
Two years into the Trump administration's efforts to roll back the ACA, the uninsured population has risen from about 12.7% in 2016 to 15.5% in 2018.
A study by The Commonwealth Fund estimates that 4 million people have lost health insurance since 2016, and that the uninsured rate among lower-income adults rose from 21% in 2016 to 25.7% this spring.
"This will be most acute at safety-net providers and other providers with a high concentration of Medicaid patients, as that population is most vulnerable to many of these changes," Bretz said in remarks accompanying the report.
Beth Feldpush, senior vice president of policy and advocacy for America's Essential Hospitals, said the report "underscores concerns we’ve had since last year's attempts to repeal the ACA and, now, with piecemeal changes that have weakened the law."
"Many of the people who lose coverage seek care at our hospitals, which adds to uncompensated costs and puts more pressure on our members' already low operating margins," Feldpush said. "Because essential hospitals, by their mission, turn no one away, this could prove financially unsustainable for some."
Although active efforts to repeal the ACA in Congress have slowed in the past year, it is facing one of its greatest threats, as a federal judge in Texas hears a lawsuit brought by 20 states that challenges the constitutionality of the sweeping healthcare law.
For-profit, Payer Outlook Stable
While the rising uninsured rate could prove challenging for not-for-profit providers, S&P analyst David Peknay said it should have little effect on for-profit providers.
"The for-profit companies we rate have been reporting some increase in uninsured patients, consistent with national trends, but the impact on ratings is also currently immaterial," he said.
The losses in covered lives for health insurance companies is offset by other factors, said S&P analyst Joseph Marinucci.
"A key contributing factor is the sustained migration of the government-sponsored insurance segments toward coordinated care (Medicare Advantage and managed Medicaid), which is expanding the market opportunity for health insurers," Marinucci said.
"We expect ratings in the insurance sector to remain relatively stable in the near term despite the growth in the number of working-age uninsured individuals," he said.
Whistleblower lawsuits had alleged that the Florida-based wound care specialist knowingly filed bogus claims to Medicare for services that weren't needed.
Healogics, Inc. will pay up to $22.51 million to settle whistleblower allegations that billed Medicare for medically unnecessary and unreasonable hyperbaric oxygen therapy, the Department of Justice said.
Jacksonville, FL-based Healogics manages nearly 700 hospital-based wound care centers across the nation.
The settlement resolves allegations that from 2010 through 2015, Healogics knowingly submitted false claims to Medicare for medically unnecessary or unreasonable HBO therapy, DOJ said.
Healogics will pay $17.5 million, plus an additional $5 million if certain financial contingencies occur within the next five years, for a total potential payment of up to $22.51 million. The company has also has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.
"When greed is the primary factor in performing medically unnecessary health care procedures on Medicare beneficiaries, both patient well-being and taxpayer funds are compromised," said HHS OIG Special Agent in Charge Shimon R. Richmond.
The settlement came as the result of whistleblower lawsuits filed by a former executive at Healogics, and a separate suit filed by two doctors and a former program director who worked at Healogics-affiliated wound care centers. The four whistleblowers are expected to share $4.2 million of the settlement.
Healogics Responds
In a statment sent to HealthLeaders Media, Healogics said it settled the case "to avoid the additional cost, disruption and uncertainty of litigation."
"The matter being resolved related primarily to a disagreement over past practices involving complex Medicare coverage rules, which are continuing to be clarified by CMS's Medicare Contractors in the current environment. The settlement is not an admission of any wrongdoing or liability and there has been no determination of liability."
"Healogics' core competencies were not in question. Healogics was proud to be at the forefront of the CMS HBO prior authorization program, which allowed us to further develop differentiating support and compliance solutions for our customers in this complex coverage environment to ensure our patients are receiving the best clinical outcomes possible."
Rate filings suggest more plan choices in 2019, but if proposed exchange premiums are approved, a typical silver exchange plan will cost $98 more per month.
Proposed 2019 exchange premiums for silver health insurance plans are 15% higher, on average, than 2018 final premiums, new research from Avalereshows.
If approved, average silver-level exchange plan premiums will be $98 more per month in the states analyzed, up from $642 in 2018 to $740 in 2019.
These findings are based on an Avalere analysis of the complete 2019 individual market proposed rate filings released publicly by 10 states and Washington, DC.
"Insurers are starting to gain a better understanding of who is likely to buy their health insurance through the exchanges, but questions about the stability of the market remain," Avalere President Matt Brow said in a media release.
"This uncertainty is likely to contribute to substantial increases in exchange premiums across many states in 2019," he said.
Avalere blamed the premium hikes on:
The discontinuation of federal reimbursements for cost-sharing reduction plans and state strategies to allow insurers offering plans in the exchanges to recoup the lost reimbursements;
The repeal of the individual mandate beginning in 2019;
The lack of federal legislation to stabilize the individual market amidst enrollee risk and structural uncertainties.
Average premium rates increased in all states analyzed by Avalere, except Minnesota, where state officials attributed the premium decline to the state's reinsurance program.
CBO Projections
The Avalere projections are in line with those in a Congressional Budget Office report last month, which projected that the premiums for benchmark plans will increase about 15% from 2018 to 2019.
CBO blamed the premium hikes on three factors:
Insurers are no longer reimbursed for the costs of cost-sharing reductions through a direct payment;
A larger percentage of the population lives in areas with only one insurer in the marketplace;
Some insurers expected less enforcement of the individual mandate in 2018 —which would encourage healthier enrollees to leave the market.
Although premiums are going up, the Avalere study also found that consumers in seven of the 10 states examined will have more silver plan options to choose from in 2019 than in 2018.
In Virginia, for example, the average silver plan options per region will more than double. However, enrollees in the District of Columbia, Maryland, and Washington will likely have one fewer exchange option per region in 2019 than in 2018.
"The rate filings suggest we may see increased competition and plan choice in many exchanges in 2019," Avalere Vice President Kelly Brantley said. "Greater plan choice will allow consumers to select a plan that best meets their health coverage needs."
The feds are looking for guidance from stakeholders as they consider revisions to the 30-year-old Stark Law, which many believe to be outdated, inefficient, and a hindrance in the shift to value-based care.
The Centers for Medicare & Medicaid Services is considering revisions to the Stark Law banning physician self-referrals, and they're asking for input from stakeholders.
"In its current form, the physician self-referral law may prohibit some relationships that are designed to enhance care coordination, improve quality, and reduce waste," CMS Administrator Seem Verma said Wednesday in a blog post.
Building a value-based, patient-centered healthcare system will require that doctors and other providers work together with patients, Verma said, suggesting that the 30-year-old Stark Law is not in sync with the goals of coordinated care.
"Many of the recent statutory and regulatory changes to payment models are intended to help incentivize value-based care and drive the Medicare system to greater value and quality," she said. "Medicare's regulations must support this close collaboration. The Stark Law and regulations, in its current form, may hinder these types of arrangements."
The RFI notes that CMS is "particularly interested in your thoughts on issues that include, but are not limited to, the structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements, the need for revisions or additions to exceptions to the physician self-referral law, and terminology related to alternative payment models and the physician self-referral law."
Specifically, CMS is asking for suggestions about:
Existing or potential arrangements that involve federal payers and referring physicians that participate in alternative payment models or other novel financial arrangements, whether or not such models and financial arrangements are sponsored by CMS.
Exceptions to Stark that would protect financial arrangements between federal payers and referring physicians who participate in the same alternative payment model.
Exceptions to Stark that would protect financial arrangements that involve integrating and coordinating care outside of an alternative payment model.
Addressing the application of Stark to financial arrangements among providers in alternative payment models and other novel financial arrangements.
“We’re going to put together sort of an inter-agency group to start looking at this,” Verma said during an American Hospital Association webinar in January.
AHA President and CEO Rick Pollock said at the January webinar that Stark has made it difficult for hospitals to take advantage of the value-based payment opportunities in which CMS has been investing.
"They both present significant barriers to the implementation of some of these new, innovative models that reward coordination and reward value," he said.
Leaders react to the announcement that Boston-based surgeon, professor, and journalist Atul Gawande, MD, will serve as CEO of the retail giant's joint project with Berkshire Hathaway and JPMorgan Chase.
Initial reactions to the news that Atul Gawande, MD, has been named CEO of the joint healthcare venture being launched by Amazon, Berkshire Hathaway, and JPMorgan Chase was mostly enthusiastic.
Those who praised Gawande's appointment noted the thought leadership in his books and essays, as well as his hands-on experience helping U.S. health systems and international organizations innovate. Those who remained skeptical suggested the buzz may be overhyped.
"So we're officially running a passion project here not a business," Craig Garthwaite, associate professor of strategy and director of the Health Enterprise Management Program at Northwestern University's Kellogg School of Management, wrote in a series of tweets Wednesday.
Garthwaite took particular issue with the fact that Gawande will retain his positions as a practicing surgeon at Brigham and Women's Hospital and a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School.
"This cannot be emphasized enough ... if the Amazon/Berkshire/Morgan venture is going to transform healthcare it will probably need a full time CEO. Unless CEO means something else in a 'disruptive' firm," Garthwaite wrote.
Others, however, expressed confidence in Gawande's ability to assemble a team to serve not only the employees of the companies behind this initiative but also to prompt wider spread change across the healthcare industry.
Marc Harrison, MD, president and CEO of Intermountain Healthcare: "With his outstanding skills and expertise, I believe he can help identify and implement solutions to help address the critical issue of the cost of care in this country," Harrison told HealthLeaders Media.
Bunny Ellerin, director of the Healthcare and Pharmaceutical Management Program at Columbia Business School: "This choice is brilliant," Ellerin said in a statement. "Dr. Gawande embodies exactly what we want in healthcare—a practicing physician with compassion, empathy and a patient-centered philosophy. He is someone who believes that we can do better and deliver improved healthcare if we focus on what’s important to the individual patient and to society more broadly."
Halee Fischer-Wright, MD, president and CEO of the Medical Group Management Association (MGMA): "This new venture has the potential to develop interesting new innovations for our industry that can help bring us closer to the medical practice model of the future, one that improves care while cutting costs," Fischer-Wright said in a statement. "We look forward to working with Dr. Gawande to realize that vision."
Donald M. Berwick, MD, a former administrator of the Centers for Medicare & Medicaid Services: Rather than a mere think tank, this will be "a do-tank," Berwick told The Boston Globe. "It's an activist move by organizations that really do want to make a change, and they have picked a leader in Atul Gawande who is almost uniquely capable of crafting the changes that are going to be need."
Andy Slavitt, another former CMS administrator, said Amazon and its partners made two wise long-term decisions Wednedsay.
"They set their health care effort up as a non-profit and aim to avoid profit making as an incentive. And they appointed public health expert, author & compassionate progressive physician to head it in @Atul_Gawande," Slavitt wrote in a tweet.
Editor's note: HealthLeaders Media senior news editor Steven Porter contributed to this report.
