District court blocks hospital acquisition of physician practice

• Hogan Lovells
• Robert F Leibenluft, Leigh L Oliver
• USA
• February 13 2014
• 

Decision
Comment

Decision

In the first ever Federal Trade Commission (FTC)-litigated challenge to a hospital system's acquisition of a physician group, the US District Court for Idaho ruled in favour of the plaintiffs (ie, the FTC, the Idaho attorney general and St Alphonsus, a competing hospital system). The plaintiffs challenged St Luke's Health System's acquisition of the Saltzer Medical Group, a 41-physician multi-specialty group, including 16 adult primary care physicians, located in Nampa, Idaho. Among the key issues in the litigation were:

• geographic market definition;
• the likely impact on reimbursement rates; and
• whether the acquisition would facilitate a more integrated healthcare delivery system that would improve healthcare quality and efficiency.

A more detailed findings of fact and conclusions of law were filed under seal to give the parties and third parties an opportunity to object to the disclosure of any material that they deem to be sensitive and confidential.

In the memorandum decision and order, the court recognised that St Luke's strategy to deliver more integrated care by using primary care physicians as care coordinators would lead to improved care in the Treasure Valley, but the court concluded that this more integrated care could be achieved through means other than acquisition of the Saltzer physicians.

Comment

This ruling is important for stakeholders in the healthcare industry, particularly hospitals, health systems and provider groups that are considering affiliations, mergers or consolidations with other provider groups, as well as health plans. Notably:

• the acquisition was not reportable under the Hart-Scott-Rodino pre-merger notification process because the value of the transaction did not exceed the minimum threshold of $70.9 million;
• the geographic market definition for the provision of adult person-centred planning services was hotly contested; and
• both the plaintiffs and St Luke's presented expert testimony on the issue of whether employing physicians was necessary in order to achieve St Luke's strategy for integrated care.

http://www.lexology.com/library/detail.aspx?g=7811a603-37d7-48cc-a766-1e76b0ced27c

Meaningful use incentive payments top $19 billion, 88% of hospitals included

Nearly 88% of eligible hospitals have received a payment for participating in the EHR incentive program, as noted in data shared at a recent Health IT Policy Committee meeting. The payments were either given to providers who could attest to having fully installed and were using EHRs according to meaningful use criteria, or those who had yet to achieve meaningful use but were in the adopt/implement/upgrade phase with their EHR system. Through 2013, more than $19 billion in meaningful use incentive payments had been distributed to eligible professionals and hospitals.

In a meeting held last April, the Health IT Policy Committee laid down some ideas for the continued development of the meaningful use incentive program. Goals for stage 3 of the program — including whether to shift compliance requirements more toward effective use of data and away from technology adoption — was among the topics covered by the committee. For providers who have attested to previous stages of meaningful use, stage 3 compliance could depend more on patient outcomes and disease prevention.

CMS continues to adjust their deadlines to allow for greater participation in the meaningful use program. The agency recently extended both the stage 2 deadline and the reporting period for providers to receive incentive payments for 2013. The decision to prolong stage 2 was due to stakeholder concern that insufficient data would be available to fully assess its effectiveness before moving on to the third stage.

Extending stage 2 will not only give more providers a chance to receive incentive payments while transitioning to the ICD-10 codes, but it will also help define the next stage in the meaningful use process. Specifically, it will allow the policymakers more time to determine reasonable benchmarks to set for stage 3. It also grants vendors additional time to create and adjust their products to better suit providers’ needs.

http://searchhealthit.techtarget.com/healthitexchange/healthitpulse/meaningful-use-incentive-payments-top-19-billion-88-of-hospitals-included/