Healthcare News of Note: Advocate Aurora Health and Atrium Health megamerger complete

• Advocate Aurora Health and Atrium Health announced they had completed their merger on Dec. 2, creating the fifth-largest nonprofit integrated health system in the nation.
• CMS put leaders at healthcare organizations on notice of its intent to continue enforcing regulatory expectations that patients and staff have an environment that prioritizes their safety to ensure effective delivery of healthcare.
• Some Medicare Advantage plans have been overbilling the government more than $1,000 per patient a year on average, according to newly released federal audits, and CMS plans to recoup the money.

1. Advocate Aurora Health and Atrium Health complete megamerger

Over the past few weeks, I have found these industry news stories that should be of interest to healthcare finance professionals.    

Advocate Aurora Health and Atrium Health completed their merger on Dec. 2, having formed the fifth-largest nonprofit integrated health system in the nation.

The newly created Advocate Health, headquartered in Charlotte, North Carolina, will serve “nearly 6 million patients annually,” stated the news release announcing the megamerger.

The release went on to say: “With revenues of more than $27 billion, the newly combined organization comprises more than 1,000 sites of care and 67 hospitals with more than 21,000 physicians and nearly 42,000 nurses. The health system delivers nearly $5 billion in annual community benefit.”

Potential for delivering value to patients

Although such healthcare mega-deals often face criticism, they do have the potential to deliver value to patients, said Andrew Donahue, HFMA’s director of healthcare finance policy.

“Health system mega-mergers have tremendous potential to promote cost-effective health care, as long as their genesis is creating value for patients while continuing to meet care purchasers’ demands for superior quality, convenient access and competitive pricing,” Donahue said. “In a heightened era of price transparency, consumerism and tech disruption, hospitals and health plans have a clear incentive to anchor their growth strategy in delivering value to patients — not higher prices for patients.”

What’s next for Advocate Health

Advocate Health will continue to maintain “a strong presence in the Chicago and Milwaukee areas, including a planned, new, Milwaukee-based institute for health equity,” the release stated, adding, “The Advocate Health Care, Atrium Health and Aurora Health Care brands will continue to be used in their respective local communities, with Wake Forest University School of Medicine serving as the academic core of the combined entity.”

An equal number of members from Advocate Aurora and Atrium Health will serve on the board of directors, the release said.

On Dec. 5, Advocate Health announced its newly appointed executive leadership team.

“This is a stellar leadership team – each with diverse experience and a proven track record to boldly lead our new organization into the future,” said Eugene A. Woods, CEO of Advocate Health.

2. Healthcare leadership need to provide ‘an environment that prioritizes’ the safety of patients and staff

CMS put leaders at healthcare organizations on notice of its intent to continue enforcing regulatory expectations that patients and staff “have an environment that prioritizes their safety to ensure effective delivery of healthcare,” in a Nov. 28 memorandum on workplace violence in hospitals.

“CMS believes that healthcare workers have a right to provide care in a safe setting,” the agency stated. “CMS health and safety requirements do not preclude healthcare workers from taking appropriate action to protect themselves from workplace violence.”

In addition, CMS stated, “All hospitals are expected to implement a patient risk assessment strategy, but it is up to the hospital to implement the appropriate strategies. …”

Just how prevalent is workplace violence in healthcare settings? CMS’s memorandum revealed that healthcare workers accounted for “73 percent of all nonfatal workplace injuries and illnesses due to violence in 2018,” citing an April 2020 Bureau of Labor Statistics Fact Sheet, which also noted the statistic has been on the upswing since 2011.

What healthcare leaders need to provide

The memorandum also noted that leadership at these healthcare facilities need to provide:

• Adequate training of staff
• Sufficient staffing levels
• Ongoing assessment of patients and residents for aggressive behavior and indicators to adapt their care interventions and environment appropriately

Furthermore, CMS stated, “Medicare certified hospitals have a regulatory obligation to care for patients in a safe setting under the Medicare Hospital Conditions of Participation (CoPs) at §482.13(c)(2).”

3. Will health plans eventually have to repay ‘an estimated $650 million’ in overpayments to CMS?

An article by Kaiser Health News (KHN) reveals findings of newly released federal audits that some Medicare Advantage plans have been “overbilling the government more than $1,000 per patient a year on average” and reports that CMS plans to recoup the money.

“Summaries of the 90 audits, which examined billings from 2011 through 2013 and are the most recent reviews completed, were obtained exclusively by KHN through a three-year Freedom of Information Act lawsuit, which was settled in late September, article authors Fred Schulte and Holly K. Hacker write.

“The government’s audits uncovered about $12 million in net overpayments for the care of 18,090 patients sampled, though the actual losses to taxpayers are likely much higher,” they write.

The authors also report, “Officials at Centers for Medicare & Medicaid Services have said they intend to extrapolate the payment error rates from those samples across the total membership of each plan — and recoup an estimated $650 million as a result.

“But after nearly a decade, that has yet to happen. CMS was set to unveil a final extrapolation rule Nov. 1 but put that decision off until February.”

Whether such repayments will occur remains to be seen.

Kathy Poppitt, a Texas healthcare attorney, quoted in the Nov. 21 article, said, “The health plans are going to fight tooth and nail and not make this easy for CMS.”