Since the approval of the Affordable Care Act in 2010, hospital consolidation has been on the rise and according to a report detailed in a recent Chicago Tribune article, 2014 followed suit with a “flurry of mergers, acquisitions and joint ventures.” The article features findings from a report issued by healthcare consulting firm Kaufman Hall, including that in 2014 95 deals were announced, down slightly from 98 in 2013 but up from 66 in 2010.
Passage of the Affordable Care Act (ACA) in 2010 increased pressure on hospitals to operate more effectively and efficiently, which has driven industry consolidation. The ACA favors a service model that rewards organizations for producing quality outcomes – not quantity – and many providers believe that compliance will be easier with the greater scale and integration enabled by mergers. Through consolidation, many also hope to be better positioned to attract new patients with expanded services and medical specializations.
Additionally, the ACA’s introduction of a massive wave of new patients into the healthcare system, combined with diminishing Medicaid and Medicare reimbursements, means that the business of healthcare is becoming increasingly expensive, especially for independent hospitals. Another challenge – and driving force behind consolidation – has been the need to upgrade IT systems and facilities to comply with rules and regulations beyond the ACA. Read More ›
The Office of the National Coordinator for Health IT (ONC) released a report on January 29 that identifies optimal healthcare information exchange and implementation standards to enable a nationally interoperable health data information exchange system by 2017 (i.e. standards so that you can have your health records sent and read by all your doctors).
In healthcare, interoperability of IT systems allows providers to share data among different practitioners, insurers, billing and scheduling systems and health information exchanges. Interoperability has the potential to improve the quality of patient care by providing access to accurate, timely information in one location, save time previously used searching for information, and make critical medical information instantly available for clinical decisions.
Under the 2009 economic stimulus legislation’s electronic health records (EHR) incentive payment program, the ONC was directed to establish a governance mechanism for the nationwide health information network. Since that time, however, the ONC has been under increasing criticism about the lack of interoperability of EHRs despite the significant public investment. Read More ›
The Michigan Court of Appeals recently decertified a class action suit against Henry Ford Health System (HFHS) and its subcontractor, a medical transcription service, for inadvertently disclosing sensitive patient information online. On December 18, 2014, a unanimous three-judge panel reversed the trial court’s denial of summary judgment in favor of the defendants. The court held that an invasion of privacy claim requires an intentional act rather than mere negligence and that the plaintiff’s claims for negligence and breach of contract require proof of an actual injury.
The class consisted of 159 patients who visited HFHS between June 3, 2008 and July 18, 2008. The case arose when the defendant subcontractor made a configuration change to its server which left certain patient records unsecured. As a result, Google’s automated web server, “Googlebot,” indexed the information and made it available for users to search online. The information included each patient’s name, date of service, and diagnoses. The unnamed lead plaintiff alleged that her records revealed a sexually transmitted disease. Read More ›
The Medicaid program, a public insurance program serving approximately 66 million low-income Americans, is at risk for losing participating providers who claim they are not being compensated fairly for their services. On January 19, 2015, the Supreme Court heard arguments in Armstrong v. Exceptional Child Center, a case that could impact the rights of healthcare providers to sue states for higher Medicaid payments. Five private companies brought suit against the director of Idaho’s health department, arguing that the state unfairly reimbursed them at rates set in 2006, despite the fact that higher rates have since been approved by the Centers for Medicare and Medicaid Services (“CMS”).
Federal law provides that state Medicaid programs must ensure payments are “sufficient to enlist enough providers,” but states have discretion to decide what that means. 42 U.S.C. § 1396a(a)(30)(A) (the “Medicaid Statute”). Central to this case is whether providers have a cause of action that allows them to seek enforcement of a federal statute. Read More ›
Reduced reimbursements. A shift toward global payment. A demand for integration, quality of care and medical specializations. In order to compete amidst today’s healthcare market pressures, independent hospitals in Michigan and around the nation are increasingly deciding that they cannot go it alone. A recent Detroit News article reveals how this trend is playing out in Metro Detroit, with one of the region’s last two independent hospitals poised for acquisition.
Observers of Detroit’s healthcare environment are reportedly not surprised by the news that Crittenton Hospital Medical Center has signed a letter of intent to join St. Louis-based Ascension Health, the largest Catholic and nonprofit health system in the nation. With Monroe-based Mercy Memorial Hospital announcing on January 6 that it is joining the ProMedica health care company, the Crittenton deal will leave Doctors’ Hospital in Pontiac as the region’s last remaining independent hospital.
Laura Wotruba, spokeswoman for the Michigan Health and Hospital Association, said that this is not a Michigan issue, but rather a widespread pattern. “[It is] a national trend [and] something we’ve been seeing around the country.” Read More ›
Thank you so much for checking out the Foster Swift Health Care Law Blog. We are taking a short break from posting and look forward to providing you the latest news and information in 2015. Happy Holidays!
Categories: News & Events
Employers, including municipal employers, have historically struggled to develop a health insurance benefit program for their employees that provides quality benefits and is cost-effective. After the Health Insurance Marketplace opened for business, many employers recommended that their employees use it to purchase individual health insurance policies, with the promise that the premium costs would be reimbursed by the employer. In fact, such employee reimbursement strategies were aggressively marketed to employers as a solution to reduce costs and comply with the requirements of the Patient Protection and Affordable Care Act (“ACA”). Little did these employers (and marketers) know, such arrangements exposed the employers to significant penalties under the ACA.
In September 2013, the IRS issued Notice 2013-54 that made clear that an employer arrangement that paid for employees’ individual health insurance policy premiums on a pre-tax basis violated the ACA. An employer that offered such an arrangement would be subject to a $100 per day per affected employee penalty ($36,500 per year, per employee).
On Nov. 7, the U.S. Supreme Court decided it would hear a case concerning the health insurance subsidies provided to millions of Americans under the Patient Protection and Affordable Care Act. A June 2015 decision is expected in the case of King v. Burwell, which challenges the Internal Revenue Service’s authority to regulate tax-credit subsidies for coverage purchased through health insurance marketplaces established by the federal government (such as the Michigan health insurance marketplace). Nationwide, more than four out of five people who have received coverage through a federal marketplace are getting a tax credit. Read More ›
On Friday, October 17, Governor Rick Snyder signed the Right to Try Act, which allows patients to try experimental drugs and other treatments before they have been approved by the Food and Drug Administration (FDA). The law gives patients with advanced illnesses access to drugs that successfully cleared Phase 1 of an FDA approval. Phase 1 testing seeks to establish a drug's safety and profile and evaluates possible side effects. It involves 20-80 volunteers and lasts approximately one year. Read More ›
As is well known by now, transitional relief from the Patient Protection and Affordable Care Act's Employer Mandate in 2015 is available for certain applicable large employers that sponsor non-calendar year health plans. This transitional relief allows the employer to avoid penalties for those months of 2015 that predate the first day of the non-calendar plan year. What is not so well-known, however, are the requirements that must be met in order for the employer to be entitled to receive the transitional relief. Read More ›