IPC The Hospitalist Company, Inc., the North Hollywood, CA-based hospitalist group practice, has acquired Continuum Geriatric Services PLLC in Livonia, MI. Financial terms of the deal were not disclosed.
CGS practices in more than 60 nursing and assisted living facilities in Michigan, where IPC has an established presence. CGS has an annualized volume of approximately 105,000 patient encounters.
Adam Singer, MD, chairman/CEO of IPC said the acquisition of CGS "represents continued expansion for IPC into closely related business segments that focus on the management and coordination of facility-based care."
"The highly dedicated geriatric physicians and midlevel providers at CGS offer IPC's Michigan operation an opportunity to improve coordination and integration of patient care with the goal of improving overall quality and offering a better experience for patients and their families," Singer said in a media release.
Jerry Wilborn, MD, co-founder of CGS, will join IPC as a practice group leader for the region's sub-acute practice groups. "This is a culmination of our long-term vision for developing a true continuum of care for our patients," Wilborn said. "IPC is well established in the area's acute care hospitals, and is best situated to develop a comprehensive program for care of the elderly in this market."
Deutsche Bank analyst Darren Lehrich estimated that the purchase "will add about 20 practitioners and is one of the larger sub-acute practices of its kind in the U.S. While revenue per encounter is slightly lower for these types of practices than hospitals, the gap is converging and we estimate revenue per encounter between $80-90 for a practice like this."
Lehrich estimated that "IPC paid roughly 1x revenue for CGS. The acquisition with 105,000 patient encounters will add roughly 3% to IPC's volumes and an estimated $8.4 million in revenue based on a Q1 run-rate numbers."
"We would not be surprised if IPC announces other similar investments ahead of their investor day scheduled on June 10," Lehrich wrote.
Patient volumes at the nation's acute care hospitals fell slightly in April, and are expected to be weak into the second quarter of 2010, according to the Deutsche Bank Hospital Volume Tracker.
Deutsche Bank's survey of more than 375 acute care hospitals found inpatient volumes down 2.2% and outpatient volumes down 1.1% for April. Inpatient surgeries were up 3%, outpatient surgeries were up 3.5%, and births were up 1.1%. ER visits fell 1.8%
"Uninsured mix looks fairly stable on a sequential basis, thus alleviating concerns about short-term bad debt volatility, although we are going to have to keep a close eye on MCO mix given steeper inpatient declines in recent months," the report stated.
Deutsche Bank said inpatient MCO volume declines are down about 5% on a rolling three-month basis. "This trend could be an indication that COBRA is beginning to roll-off, although we emphasize that we are not seeing corresponding growth in the uninsured volume," the report said.
Deutsche Bank anticipated Q2 volume growth of between 1% and 2%. "We believe our models have cushion in them with respect to conservative bad debt assumptions. We'll reassess volume, pricing and bad debt assumptions once we've gained a fuller picture on Q2 trends in the coming weeks," the report said.
Despite the soft volumes, Deutsche Bank said it will continue its Buy ratings on the major investor-owned hospitals, including Community Health Systems, Health Management Associates, Inc., LifePoint Hospitals, Inc., Tenet Healthcare Corp., and Universal Health Services, Inc., "based on reasonable valuations, upside risks associated with healthcare reform, accretive acquisitions, the potential for better volume and mix with an economic recovery, and continued execution with expense management over the short-run."
Pay increase budgets have fallen to 2.5%, down from 3% in 2009. Little change is expected over the next year, as healthcare organizations predict only a slight uptick in 2011 to 2.7%, according to the new 2010 Compensation Data Healthcare survey.
"With a slow economic recovery expected, healthcare organizations continue to make conservative compensation choices," said Amy Kaminski, director of marketing for Compdata Surveys, a compensation and benefits survey data provider. "Although organizations are making cuts to overall pay increase budgets, a larger portion of those budgets is likely being focused on providing the necessary pay increases to retain key employees, such as nurses and physical therapists."
Pay increase budgets vary within the industry, as critical access hospitals and physician clinics report the highest budgets, 2.8%. Home care respondents follow at 2.6%. Hospitals and rehabilitation facilities reported pay increase budgets of 2.5% and 2.3%, respectively. Behavioral healthcare had the lowest pay increase budget, 1.7%.
Physician clinics are projecting the highest pay increase budget in 2011 at 3.1%, with behavioral healthcare projecting the lowest, 1.8%.
The survey results show pay increase budgets vary by state. Arizona and Nebraska reported the highest pay increase budgets at 3.1%, closely followed by Nevada and Washington at 3%. Respondents in New York and California report pay increase budgets of 2.8% and 2.7%, respectively. Healthcare organizations in Minnesota had the lowest pay increase budget, 2%.
The survey contains data on more than 200 industry-specific job titles and more than 250 benchmark titles ranging from entry-level to top executives. Data was collected from more than 1,200 healthcare employers across the country.
Previously, CMS allowed hospitals and CAH to accept credentialing information about telemedicine providers from the distant site, but not privileging information.
"CMS has become increasingly aware, through outreach efforts and communication with various stakeholders in the telemedicine community . . . of the urgent need to revise the CoPs in this area so that access to these vital services may continue in a manner that is both safe and beneficial for patients and is free of unnecessary and duplicative regulatory impediments," the agency stated in its proposed rule.
Additionally, CMS cited smaller hospitals' lack of clinical expertise to adequately evaluate a variety of privileges as one of the reasons why a change was needed.
CMS will post the proposed rule on the Federal Register for a 60-day comment period, and the public can submit comments to www.regulations.gov. The revised language is contained in two sections of the CoPs: §482.12, "Governing body," and §482.22, "Medical staff."
"Upon reflection," CMS noted, "we came to the conclusion that our present requirement is a duplicative and burdensome process for physicians, practitioners, and the hospitals involved in this process, particularly small hospitals, which often lack adequate resources to fully carry out the traditional credentialing and privileging process for all of the physicians and practitioners that may be available to provide telemedicine services."
Under current CMS regulations, hospitals receiving telemedicine services from a distant site must privilege each physician or practitioner providing services to their patients as if the practitioners were onsite. While those hospitals could use third-party credentialing and verification organizations to make the process easier, the hospital's governing body remains responsible for all privileging decisions.
This process had been simplified: Hospitals that were accredited by The Joint Commission were deemed to also have met their Medicare condition of participation—including credentialing and privileging requirements—under the Commission's statutory deeming authority.
But with the passage of the Medicare Improvements for Patients and Providers Act of 2008, the statutory recognition of The Joint Commission's hospital accreditation program was ending—effective in several weeks on July 15. The law now would require The Joint Commission to secure CMS approval of its standards to confer Medicare deemed status on hospitals.
With this change, small and critical-access hospital medical staffs using telemedicine services could face "the burden of privileging hundreds of specialty physicians and practitioners" that large academic medical centers make available to them, CMS noted in the Register proposal.
Emily Berry is an associate editor for Briefings on CredentialingandCredentialing Resource Center Connection, and manages the Credentialing Resource Center. You can reach her at firstname.lastname@example.org.Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached email@example.com.
Springfield, OR-based PacificSource Health Plans has completed its previously announced $46 million acquisition of Clear One Health Plans, Inc., which becomes a wholly owned subsidiary.
Included in the acquisition are Bend, OR-based Clear One subsidiaries Central Oregon Individual Health Solutions, Inc., Trusteed Plans Service Corp., Clear Choice Properties, LLC, and Clear One Life and Health, LLC.
The acquisition, announced in December, was approved by state and federal agencies, including the Oregon Insurance Division, and the Centers for Medicare & Medicaid Services. Clear One shareholders approved the deal April 23, and will receive $26 per share in cash.
"Serving Medicare and Medicaid beneficiaries has been a longtime goal for PacificSource," said Ken Provencher, president/CEO of PacificSource, an independent, not-for-profit community health plan. "The acquisition of Clear One, with their expertise in government programs, will allow us to be a true community health plan, providing health coverage to people throughout their lives." Provencher replaces Clear One President/CEO Patricia Gibford, who retired Friday.
PacificSource employs 590 people, serves more than 259,000 policy holders, and has 6,200 employer clients throughout the Northwest. Clear One has 97 employees and covers 47,000 people, including 28,000 Medicaid enrollees, and 10,000 Medicare enrollees. The TPSC subsidiary has an additional 62 employees and covers 55,000 lives.
Staff reductions will be minimal, PacificSource said, with more than 90% of Clear One staff retained. "Our first priority is to take care of our customers, and Clear One’s talented employee team is crucial in making that happen," said Paul Wynkoop, vice president of human resources at PacificSource. "Clear One customers will continue to work with the experienced representatives they’ve come to know."
PacificSource will consolidate its Bend office, using the existing Clear One office as its Central Oregon location. A Clear One sales office in Kalispell, MT, and the TPSC office in Tacoma, WA, will remain open.
PacificSource named Peter McGarry, the insurer’s acting senior vice president of government programs, to oversee its new Medicare and Medicaid lines. McGarry is now vice president of provider network for PacificSource, and will continue in that role as he oversees the Clear One in the interim.
Clostridium difficile, a germ that causes deadly intestinal infections in hospital patients, has long been thought to be spread only by contact with contaminated surfaces. But a new study finds that it can also travel through the air. British researchers emphasized that there is no evidence that C. difficile can be contracted by inhaling the germs. Rather, they float on the air, landing in places where more people can touch them, the New York Times reports.
Home healthcare provider Gentiva Health Services, Inc. announced today that it will pay $1 billion for hospice provider Odyssey HealthCare, Inc., in an all-cash transaction valued at $27 per share.
Atlanta-based Gentiva said in a release that the acquisition will create the largest hospice and home healthcare providers in the nation, operating in 30 states with an average daily patient census of 14,000. Based on the two companies' fiscal 2009 financials, the merged companies anticipate more than $1.8 billion in annual revenue, comprised of 60% in home healthcare revenue and 40% in hospice revenue.
"The combination of the two companies clearly positions us as a leader in both home health and hospice care in the United States," said Gentiva CEO/President Tony Strange, in a prepared statement. "The two companies share similar geography between Gentiva's home health operations and Odyssey's hospice operations, with very little overlap between the two companies' hospice programs."
Odyssey President/CEO Robert A. Lefton said the two companies operate "complementary businesses that are positioned for continued leadership in the hospice industry. We believe Gentiva shares our commitment for compassionate, personalized care, and we look forward to better serving our patients and their families with the enhanced resources and depth of the combined company."
The deal was unanimously approved by both companies’ boards, and Odyssey’s board recommended that shareholders approve the acquisition. The deal is expected to close in the third quarter of 2010, subject to standard closing conditions. Gentiva will raise $1.1 billion in new debt to fund the purchase and to refinance existing debt, and expects the deal to be accretive to adjusted earnings per share, exclusive of one-time costs, within the first year after closing.
National Nurses United at its founding convention last December vowed to create a unified agenda and push for staffing ratios at every local affiliate. They're making good on that pledge in Minnesota, and they are showing themselves to be formidable. Pay attention to this fight, because it may soon come to a hospital near you.
Last week, 12,000 members of the NNU-affiliated Minnesota Nurses Association at 14 Minneapolis-area hospitals overwhelmingly voted to authorize a one-day walkout on June 1 unless their contract demands are met. Linda Hamilton, president of the MNA, says the fight is about patient safety, not money.
"What are we fighting for? The simple answer is this: We're fighting for you. We're fighting for any patient who ever walks through the doors of one of our hospitals," Hamilton wrote in a May 15 editorial in the Pioneer Press.
"The math doesn't lie: The thinner nurses are spread in hospitals, the greater number of patients who die… Despite what the Twin Cities hospital systems want readers to believe, this contract fight is not about economics. For nurses, this is much more personal than a paycheck or a pension benefit. This is about our patients," Hamilton wrote. "Everybody knows a nurse, and everybody knows nurses are not greedy."
Hamilton may be sincere. Or, you can argue that staffing ratios are just a clever way for nurses' unions to protect jobs and increase membership under the guise of "patient safety." Whether or not a specific level of nurse staffing has any affect on patient safety or quality of care is one of the most hotly contested issues in healthcare.
There is also the blatant contradiction of a walkout in the name of patient safety. How can the MNA say that staffing ratios are critical to patient safety, and then threaten to abandon the patients they claim to be "fighting for?" Who bears the responsibility if a patient is harmed by this walkout? Is this about patient safety, or isn't it?
Still, Hamilton's argument is compelling for the general public because the union has made its grievance a fight for the little guy. The cause of patient safety is something that resonates with everyone. Who hasn't been either a patient or visited a loved one in a hospital, in pain, at their most vulnerable? This chord strikes deep.
The local news videos of rank-and-file MNA nurses marching in front of their hospitals, wearing their uniforms, waving picket signs, and demanding patient safety gets prime air time. Nice visuals! Very powerful!
Hamilton skillfully works the corporate greed angle when she complains that the six "nonprofit" (quotations hers) health systems made a combined $700 million in profits during recession-wracked 2009, and spent money on huge executive pay hikes and frivolous projects that add nothing to patient care.
The 14 Twin Cities hospitals have mounted their own media counteroffensive, and they've done an admirable job. They make themselves available to the media. They've set up a website and posted the union's contract demands with each health system, and each health system's counter-offer. They've banded together to get their message out, using amiable spokeswoman Maureen Schriner to quickly address media queries. (Their first spokeswoman was fired earlier this month after local news reported that she had pleaded guilty in 2006 to the misappropriation of about $15,000 at a South Dakota hospital. D'oh!)
Schriner's arguments are also compelling, but they're harder to fashion into an easily digestible sound bite. She says full-time nurses average about $79,000 a year plus benefits at the 14 hospitals, which is hardly chump change. She notes that Minnesota hasn't needed strict staffing ratios to score among the best states in the nation when it comes to patient safety, quality outcomes, and efficiencies. "Minnesota is a national leader. We have a reputation for quality patient care and innovative initiatives on patient safety," Schriner says. "For us to go to a national standard, why would we want to do that? We are above the national standards in so many areas already. We want to look to the future."
Technology is another issue.
"The union is asking for the contract to say you cannot introduce any new technology if it is going to reduce staff," Schriner says. "Of course we want to introduce new technology if it's going to benefit patients. Is the deciding factor of whether or not we use technology based on how it affects (full-time employees)?"
Despite their efforts, Twin Cities Hospitals' fight for public opinion will be an uphill slog. The hospitals' message is about economics. The nurses' message is also about economics, but they're calling it patient safety—easily identifiable, succinctly encapsulated, with an immediate emotional connection with the public. Plus, they control all the compelling video.
A hospital executive in a business suit explaining proposed pension reductions as a percentage of overall payroll expenses, or a website detailing contract specifics on "mandatory low need days," "unit closures," and "flex time summer deferral bonuses" cannot compete for the public's heart with video of a uniformed nurse holding a picket sign looking earnestly into a camera and saying she is fighting for you.
Note: You can sign up to receiveHealthLeaders Media HR, a free weekly e-newsletter that provides up-to-date information on effective HR strategies, recruitment and compensation, physician staffing, and ongoing organizational development.
The Health Alliance of Greater Cincinnati and The Christ Hospital will pay $108 million to settle a federal whistleblower suit alleging that the hospital ran a kickback scheme with physicians to funnel patients to its cardiac care center, the Department of Justice announced.
Susan Croushore, president/CEO of The Christ Hospital, said the hospital and HAGC dispute the government's allegations, which also include violations of the False Claims Act, but signed the agreement "instead of risking a potential catastrophic judgment that could jeopardize our ability to provide service to this community."
"This settlement allows The Christ Hospital to avoid the risk of the in excess of a $1 billion award that was sought by the government," Croushore said in a prepared statement.
The government alleged that The Christ Hospital, a 555-bed acute care hospital in Mount Auburn, OH, limited work at the Heart Station–an outpatient cardiology testing unit that provides non-invasive heart procedures–to cardiologists who referred patients to the hospital. Cardiologists whose referrals contributed at least 2% of the hospital's yearly gross revenues were rewarded with a corresponding percentage of time at the Heart Station, where they could bill for the patients they treated at the unit and for any follow-up procedures that these patients required, prosecutors alleged.
The allegations violate the federal Anti-Kickback Statute, which prohibits a hospital from offering or paying, or a physician from soliciting or receiving, anything of value in return for patient referrals. Claims to Medicare and Medicaid that were submitted by The Christ Hospital as a result of the kickbacks also violated the False Claims Act, prosecutors said.
"Healthcare providers should make medical decisions based on the needs of their patients, not on the financial interests of physicians or other providers," said Tony West, assistant attorney general for the Civil Division of the Department of Justice. "We will not allow hospitals to put profits ahead of sound medical decision-making."
Harry Fry, MD, a retired cardiologist, filed the whistleblower suit against The Christ in 2003, and could collect $23.5 million from the settlement. The Justice Department investigated the allegations for five years before intervening in 2008.
Croushore said The Christ "provided necessary and often life-saving medical care by ensuring sufficient cardiologists coverage to read heart tests provided in the hospital."
"There was no challenge in this case to the medical necessity or quality of patient care. Nor did the government suffer any loss, as it did not expend any money for the services beyond standard Medicare payments," Croushore said.
The Christ Hospital declined to enter into a corporate integrity agreement that was acceptable to HHS' Office of the Inspector General. As a result, OIG did not provide a release of its administrative exclusion authorities and is still evaluating the case.
Occupational healthcare provider U.S. HealthWorks today announced the acquisition of Technimed Occupational Medicine and its two healthcare centers in Vernon, and Commerce, CA.
Financial terms of the deal were not disclosed. With the acquisition, Valencia, CA-based U.S. HealthWorks now operates 66 medical centers in California and 134 nationwide.
"We are continuing our expansion in the important California market," said Therese Hernandez, senior vice president of operations for U.S. HealthWorks. "This is an exciting acquisition for us because the addition of these two centers enables us to better serve our Los Angeles-area clients and patients."
Technimed provides injury and illness diagnosis and treatment, preventive services, pre-employment and post-offer exams and testing, and return-to-work programs.
"U.S. HealthWorks is uniquely positioned to provide a statewide network for employers, as well as having real-time electronic access for employer clients who are more and more frequently using online resources to better manage their claims," said Technimed founder David B. Landers, MD. "U.S. HealthWorks has it all, so our choice of a successor was a simple one."