Healthcare IT systems provider Quality Systems Inc., of Irvine, CA, announced today it will acquire inpatient services software developer Opus Healthcare Solutions, Inc. Financial terms were not disclosed in a media release announcing the deal.
QSI said Austin, TX-based Opus will be combined with Sphere Health Systems, Inc., a Laguna Hills, CA-based healthcare software services developer that was acquired in August. The two acquisitions will become part of NextGen Healthcare Information System, Inc., QSI’s wholly owned subsidiary that will focus on community and rural hospitals with 100 beds or less.
"We have seen demand grow in the rural and community marketplace due to the Stark relaxation, emergence of health information exchange initiatives, and impending incentives resulting from the American Recovery and Reinvestment Act," said NextGen Healthcare President Scott Decker, in a media release. "Through our many years of working with ambulatory providers closely associated with or owned by community hospitals, it became clear that we could meet this demand by broadening our offering to include both ambulatory and inpatient solutions."
Decker said there is a growing demand for a single, "cloud-based" technology platform that can coordinate across both ambulatory and inpatient care settings. "These new acquisitions afford us the necessary capabilities to address client needs and fill a void currently present within the rural and community hospital marketplace," Decker said.
CVS/pharmacy has reportedly agreed to pay Indiana $1.95 million to settle complaints that two pharmacists with long-expired licenses had dispensed more than 60,000 prescriptions at two stores, Indiana Attorney General Greg Zoeller announced this week.
Indiana prosecutors said in a media release that between 1997 and 2007, CVS employed two pharmacists whose licenses had expired: Morris "Mo" Skirvin at a store in Nashville, IN, and Edward Certain at a store in Marion, IN.
The Indiana AG's Medicaid Fraud Control Unit investigation reported that Skirvin's pharmacist license expired in 1990, long before his employer, Hook-SupeRx, was acquired by CVS, but he did not renew the license and allegedly forged a new one each renewal period.
After MFCU began investigating Skirvin's license, CVS disclosed that another pharmacist, Certain, also had been practicing without a license. Certain had a valid license at one time, but it expired in 2002 and he did not renew it, MFCU reported.
Together, Skirvin and Certain filled an estimated 60,778 prescriptions, the investigation alleged, and the Indiana Medicaid program was overbilled for fees to which the unlicensed pharmacists were not entitled, prosecutors said.
"To its credit, CVS has resolved this situation in a responsible way," Zoeller said. "First, it came forward and acknowledged that a pharmacist with an expired license had been employed at its Marion store. Now, CVS will implement a screening program to ensure that none of its pharmacist employees are operating without a license."
CVS issued a statement reiterating much of what the AG said. "There have been no allegations that any customers were harmed in any way as a result of the employment of these individuals, who ceased employment with CVS/pharmacy in 2007. There have also been no complaints or issues raised by any customers. There is no admission or finding of wrongdoing by CVS/pharmacy related to these allegations and the company entered into this agreement to avoid the delay expense, inconvenience and uncertainty of litigation," CVS said.
Zoeller agreed that the $1.95 million settlement—to be paid within two months—is not a fee, a fine or an admission of guilt. He said the money will be used to reimburse the Indiana Medicaid program and investigative costs.
As part of the settlement, CVS agreed to verify that pharmacist employees and contractors have valid Indiana licenses, and to require applicants for pharmacist positions to disclose any aliases they have used and whether they are ineligible to hold a license.
Within the next three months, CVS will perform records checks on its Indiana pharmacist employees through the Indiana Professional Licensing Board. The company will perform regular checks every six months for three years, the agreement said.
"The agreement underscores that the health and safety of its customers is a top priority for CVS/pharmacy," CVS said.
The former CFO of Tustin Hospital and Medical Center in Los Angeles has pleaded guilty to paying illegal kickbacks for patients recruited from the city's "Skid Row" area, the U.S. Attorneys Office in Los Angeles has announced.
In a plea agreement filed in United States District Court Tuesday, Vincent Rubio 49, of Los Angeles, admitted paying kickbacks to "marketers" who recruited homeless people and transported them to Tustin Hospital, federal prosecutors said in a media release. With the plea, Rubio faces up to 15 years in federal prison. He is expected to make his initial appearance in United States District Court on March 1.
Rubio admitted to participating in a scheme to pay Estill Mitts, who operated a center on Skid Row. The center allegedly recruited homeless people to receive unnecessary health services and others to refer homeless Medicare and Medi-Cal beneficiaries to Tustin Hospital for in-patient hospital stays. Tustin Hosptial entered into "consulting" contracts intended to conceal the kickbacks. Tustin billed Medicare and Medi-Cal for in-patient services provided to the recruited homeless people, including those for whom in-patient hospitalization was not necessary, according to the federal government.
Rubio also admitted that he failed to report the payments he received from one of the marketers on his federal tax returns, the feds added.
Tustin is a subsidiary of Pacific Health Corp., which also owns Los Angeles Metropolitan Medical Center, Anaheim General Hospital, and Bellflower Medical Center.
Rubio is one of five people charged so far in an ongoing investigation into healthcare fraud related to Skid Row residents. Mitts, 65, of Los Angeles, pleaded guilty in September 2008 to conspiracy to commit healthcare fraud, money laundering, and tax evasion, and he is scheduled to be sentenced on June 21.
Rudra Sabaratnam, 65, one of the owners of City of Angels Hospital in Los Angeles, pleaded guilty in December 2008 to paying illegal kickbacks for patient referrals, and he is scheduled to be sentenced on April 5. Dante Nicholson, 52, senior vice president of City of Angels, pleaded guilty in March to paying illegal kickbacks for patient referrals, and he is scheduled to be sentenced on June 14. Robert Bourseau, co-owner of City of Angels, pleaded guilty in June to paying illegal kickbacks, and he is scheduled to be sentenced on Feb. 22, according to the federal government.
The theft of 57 hard drives from a BlueCross BlueShield of Tennessee training facility last fall has put at risk the private information of approximately 521,761 customers in at least 32 states, the insurer said this week in an investigative update.
Of those customers identified as being at risk, 220,133 have received notices that their personal information was included on the stolen hard drives, BCBS of Tennessee said in a media release.
The hard drives containing 1.3 million audio files and 300,000 video files related to coordination of care and eligibility telephone calls from providers and members were reportedly stolen from a leased office in a Chattanooga strip mall that once housed a BCBS of TN call center. The video files were images from computer screens of customer service representatives and the audio files were recorded phone conversations from Jan. 1, 2007 to Oct. 2, 2009. The files contained customers' personal data and protected health information that was encoded but not encrypted.
The 220,133 members notified are in the so-called Tier 3 category, confirmed as having their name, address, BlueCross member ID number, diagnosis, Social Security number, and/or date of birth included in the stolen hard drives. Notifications have been sent to all identified Tier 3 members.
Additionally, 301,628 current and former members have been identified in the Tier 2 category. Members in the Tier 2 category of personal information (name, address, BlueCross member ID number, date of birth, and/or diagnosis) will begin to receive their notifications with details of the hard drive theft and remediation services offered to them in mid-February, the insurer said.
The number of members reported in the Tier 2 category is larger because of BlueCross' decision to offer remediation services to all family members associated with the specific subscriber ID number identified during the data audit process. This decision was made to ensure all potentially at-risk members are protected.
To illustrate this point, 131,909 subscriber ID numbers were identified during the review of the customer service calls and there were 169,719 family members associated with the member ID numbers. Each of these 131,909 subscribers will receive a Tier 2 letter that extends the offer of remediation to all family members.
As of Feb. 5, there have been no reports of identity theft or credit fraud of BlueCross members as a result of the theft, the insurer said.
Hospital patients, their families, and visitors may be stealing about $52 million in property each year from hospital rooms, including towels, linens, TV remotes, surgical scrubs, and even telephones, according to figures extrapolated from a recent survey.
The survey, conducted by the Irving, TX-based healthcare supply chain network VHA Inc., found that 64% of the nearly 100 hospitals that responded reported that patients and/or their families and visitors pilfered hospital property.
Nearly 30 hospitals in the survey reported that the losses amounted to less than $15,000. While the sum is hardly a bank breaker for most hospitals, VHA Implementation Manager Jack Parker says it's another "headache" for hospitals and takes money away from investments in clinical and operational improvements.
"It's not a huge amount for each hospital, but you multiply $15,000 times a few thousand hospitals and it becomes a lot of money," Parker says. "I've been in hospitals where they have stolen the telephones right out of patients' rooms, or walked out with a TV, saying they were the repairman. They can't even use the telephones because they're not made to work in the home."
"Unfortunately, the nurses are very busy and they can't be police. And we don't expect them to be police. But patients need to understand that hospitals are not hotels and do not factor room supplies into the cost of healthcare," he says.
Parker says there is no indication that thefts are on the increase because of the rough economy, but he adds it's a bigger issue for hospitals that are searching to reduce costs. "It's just one of those things that have always gone on, and it's one of those things where when you work in an industry whose margin is less than 2%, you have to look at every dollar," he says. "That $15,000 has to come out of your budget somewhere."
Parker recommends not overstocking patient rooms to minimize the impact of the thefts. "When people go to a hotel and there are three or four bottles of shampoo, people will take them, thinking they paid for them," he says. "Bed linens, water pitchers, are things that aren't charged to a patient. It's overhead for the hospital. So anything you can do to put less in the room, as long as the patients' needs are met, is what you need to do.
Parker says his cost estimates don't include theft of hospital equipment by employees. He estimates that the theft of surgical scrub suits, for example, is an even bigger issue that patient thefts.
"That is thousands of dollars, maybe tens of thousands of dollars. If I had to point to the one thing that was taken the most in hospitals, it's scrubs, and 99% of it is employees," he says.
Shareholders of pharmaceutical and healthcare consultants IMS Health have approved the previously announced acquisition by TPG Capital, LP, and the CPP Investment Board, in a deal valued at $5.2 billion, IMS Health announced this week.
The agreement was unanimously approved by the IMS board in early November. Under the agreement, IMS shareholders will receive $22 cash for each share of IMS common stock they own, which at the time of the Nov. 5 announcement represented a 50% premium over the closing share price on October 16, the last trading day prior to public speculation that IMS was considering its strategic alternatives.
The acquisition will be financed through a combination of equity to be invested by TPG and CPPIB, and debt financing to be provided by affiliates of Goldman, Sachs & Co.
"This transaction enables our shareholders to realize substantial value from their investment in IMS with an immediate cash premium, while at the same time strengthening our position to capture long-term growth opportunities," IMS Chairman/CEO David R. Carlucci said during the November announcement. "With the backing of world-class private equity partners, we will continue our focus on expanding into new markets, further improving the quality and depth of offerings we deliver to our clients, and playing a bigger role in the healthcare market."
With operations in more than 100 countries, IMS Health provides market intelligence to the pharmaceutical and healthcare industries. The company generated $2.3 billion in revenues in 2008.
TPG Capital is the global buyout group of TPG, a private investment firm with approximately $45 billion of assets under management. TPG Capital’s healthcare investments have included Axcan Pharma, Biomet, Fenwal, IASIS Healthcare, Quintiles Transnational, and Surgical Care Affiliates.
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. The CPP Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure, and fixed income instruments. Headquartered in Toronto, the CPP Fund totaled $116.6 billion in June 2009.
Adventist Health has signed an agreement with the Frank R. Howard Foundation to build a new, 25-bed community hospital in Willits, CA.
Adventist Health will continue to lease the existing hospital from the foundation while funding construction of the hospital in Willits, located about 118 miles north of San Francisco.
"This will enable us not only to have a new facility for our community, but also starts to fulfill our vision for a master campus plan," said Margie Handley, chair of the foundation's nine-member board, in a media release.
Adventist Health Senior Vice President Scott Reiner, who chairs the hospital board, said the project represents "a significant investment in this community."
"Our organization anticipates investing $58 million into the new Howard Memorial Hospital and then will continue to lease the property that the hospital will be built on," Handley said.
The project design is expected to be finalized by this fall. Adventist is a not-for-profit, faith-based, 17-hospital, healthcare system operating in California, Hawaii, Oregon, and Washington.
News last week that St. Mary's Hospital in Passaic, NJ, was emerging from bankruptcy after declaring about $100 million in debts last March provides an excellent example of what can happen when unions and management work together.
A key component of the reorganization plan was the unions' ratification in December of a plan to cut pay by 5%, with an understanding that the cuts would be restored incrementally in the coming months.
"Initially we fought court-ordered concessions," says Virginia Treacy, RN, executive director of JNESO District 1, which represents about 450 nurses at St. Mary's. "We'd represented RNs in this hospital since 1981, and we have seen three administrations come and go in the last seven years, two of whom went bankrupt. We didn't have much faith in the management to actually use financial concessions from us to turn things around."
The unions' intransigence shifted, however, after St. Mary's hired Michael J. Sniffen as president/CEO in July.
"I've been doing this for 32 years and I'm not easily swayed, but I find him to be a very credible administrator—honest, and very transparent," Treacy says.
"He was very credible, even on simple things," she says. "We had people who had not received a correct pay check in more than three years. We brought the problem to him, he said he would fix it, and he did! That is the first time in a good 10 years that I could have said somebody in administration listened, heard what the problem was, and said: ‘That is not acceptable. I will get it fixed.'"
Sniffen says he has worked very hard to earn the unions' trust. "I was very transparent with them about what I was doing, how I planned to do it, and the data I was using to make the decisions," he says. "I pledged a partnership and demonstrated that by being open to their suggestions, meeting with their members, listening to the issues they were dealing with daily, and trying to—in small ways—be responsive to the day-to-day issues."
While trying to find a big picture way to keep the hospital afloat, Sniffen says he also took time to address employees' basic grievances. "It really wasn't big earth shattering stuff, but the little things add up. It was a litany of things that would sound trivial if you heard them in isolation of one another," he says.
"On a global, more strategic bankruptcy issues, I'd show them the economics that we have to work through. At the end of the day, I'd tell them, ‘We either all rise or fall together. I'd like to hope we can figure out a way to do this together.'"
Recognizing that there was nothing he could to do correct the bad relations with previous administrations, Sniffen focused on what he could do going forward to build trust.
"I'm a firm believer that relationships are key in any situation, but you have to invest in the little things to understand who you are working with so it's not based purely on the black and white of a number," he says. "Spend time getting to know who the person is and what drives them. If you show an honest interest in the person and the overall situation, people will have a dialog with you."
To build staff unity, Sniffen created a "gain sharing" bonus based on productivity and cash flow that would be divided equally among all of the hospital's employees. "Under the formula, if there is money to be distributed, I don't want it weighted by salary. I want all of us together. If it is $1 million and there are 1,000 people, divide it," he says. "That was an important commitment that the unions made, which made me believe we could work together. Even though they weren't representing all employees, they understood it had to be equal for everyone."
Treacy says giving every employee an equal share in the gain sharing solidified a sense of commitment from all the stakeholders, even if no money is ever paid out. "It sounds kind of hokey, but there is a very nice sense that we are all on the same team and if we do well together we will all share the reward. And if we don't, we won't," she says. "The fact that the CEO's share of any economic windfall is identical to the housekeeper or the nurse—that there is no distinction based on title or department—we found that to be very attractive."
Challenges still remain and the future of the 292-bed nonprofit acute care hospital–the only remaining hospital in urban, working-class Passaic—remains cloudy. The track record for other financially troubled hospitals in the Garden State is not encouraging. St. Mary's is the first hospital to emerge from Chapter 11 bankruptcy in New Jersey. Since 2007, six New Jersey hospitals have filed for bankruptcy, five of which have either closed or sold their assets in bankruptcy.
Treacy concedes that unions and management likely would not have been so flexible in better times, if the hospital wasn't teetering on insolvency, leaving the city without a hospital, and employees without a job in a rough economy. "Out of desperation comes innovation, and I think everybody was desperate here—the community, the hospital, and the employees, and therefore the unions," she says. "Being desperate, we decided we would try to pull out together.
Even with considerable hurdles ahead, Sniffen is optimistic about the future of St. Mary's. "I'm very confident because there is an understanding to continue to be solid we have work together," he says.
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Budget proposals from the White House to reduce tax deductions for charitable donations and freeze discretionary spending will harm fundraising for nonprofit hospitals, said the Association for Healthcare Philanthropy (AHP).
The move, which includes capping charitable donations for those making more than $250,000 to 28%, will stop wealthy donors from giving to nonprofits and dry up funds to help the poor and underinsured, according to the group.
"Despite signs that the economy is starting to recover, nonprofits hospitals are struggling to keep up with the burgeoning numbers of under- and uninsured Americans that are seeking medical care in their local community emergency rooms," said William C. McGinly, president/CEO of AHP in a media release. "A limit on charitable deductions aimed at those who are in a financial position to make the most significant contributions sends the wrong message at the wrong time."
"This is a significant challenge," McGinly said.
"Hospitals have cut back on spending, mainly at the expense of necessary capital improvements. A three-year discretionary spending freeze is likely to cut back the ability of state and local governments to provide health-related grants and Medicaid funding, making it imperative for individuals, businesses and foundations to step up their philanthropic support."
A December survey of AHP members found them attempting to cope with strained economic conditions by boosting fundraising efforts and controlling costs. Three out of four reported increased contact with donors and many put more emphasis on major gifts.
Almost half applied for more grants and put more energy into annual giving and planned giving programs, while at the same time more than half reduced their fundraising budgets and about one quarter decreased staff, AHP said.
Despite these extra efforts, 85% of survey respondents said their philanthropy programs were negatively affected by the economy last year, forcing almost half to downgrade giving projections for the year. Annual direct mail campaigns and special event fundraisers were hard hit.
Overall, far fewer major gifts were secured, and 40% of respondents reported declines in revenue from government and private grants, and 80% cited declines in investment income, with 43% seeing a significant decrease.
Some 27% of development organizations used more of the money they raised in 2009 to meet increased demands for hospital charity care, the report found, underscoring the increased need for philanthropic support to cover costs that nonprofit hospitals are no longer able to fund from decreasing margins. A November 2009 American Hospital Association study found that 34% of U.S. hospitals expected financial losses in the first half of 2009—up from 29% for the same period in 2008—placing a growing need for philanthropic funding to fill the gap.
The healthcare sector created 14,500 new jobs in January and overall employment from all business sectors fell by 20,000 jobs, even as the unemployment rate fell from 10% to 9.7%, new Bureau of Labor Statistics preliminary data released this morning show.
Ambulatory services accounted for 15,000 payroll additions in January, physicians' offices accounted for 5,600 payroll additions, and hospitals accounted for 5,000 new payroll additions.
Some areas of the healthcare sector lost jobs in January. Nursing and residential care facilities reported 5,800 payroll reductions,
The healthcare sector created 267,000 new jobs in 2009, including 22,000 payroll additions in December.
The BLS information from the last two months is considered preliminary and may be revised.