Glimmers Of Stability Emerge For Not-For-Profit, Public Hospitals, But They’re Not Out Of The Woods
"That's still an anemic margin overall," said Christopher Kerns, executive director at the Advisory Board. But mergers and acquisitions, steady patient volumes and revenue cycle improvements fueled rising revenue while cost-cutting initiatives. In other industry news: mandatory payment models, HIPAA fines, private-equity and physicians' practices, and more.
Operating Margins Stabilize, But Not-For-Profit Hospitals Still Vulnerable
Not-for-profit and public hospitals' revenue growth has edged ahead of expense inflation for the first time since 2015, according to a new report. Median annual revenue growth rose to 5.1% while expense growth dropped to 5% in 2018, new preliminary data on 150 hospitals from Moody's Investors Service show. Although hospitals were able to meaningfully reduce their expense growth rate from 7.1% in 2016 to 5.7% in 2017, that didn't keep up with revenue growth's decline from 6.1% to 4.6%. (Kacik, 4/26)
CMS To Use Mandatory Models ‘Very Judiciously,' Official Says
The CMS will only use mandatory payment models when the agency feels it can't get enough participation or have adverse selection for voluntary models, a Center for Medicare and Medicaid Innovation official said on Friday. The remarks from deputy director Amy Bossano during the National Association of ACOs spring conference in Baltimore comes a day after CMS Administrator Seema Verma hinted that some upcoming models will be mandatory. (King, 4/26)
HHS To Cap HIPAA Fines Based On 'Culpability'
HHS updated the maximum it will penalize providers, health plans and their business associates in the wake of HIPAA violations, in some cases dropping the upper limit by more than $1 million. The new system sets annual limits for these fines based on the organization's "level of culpability" associated with the HIPAA violation, according to the department's notice of enforcement discretion released late Friday. That means organizations that have taken measures to meet HIPAA's requirements will face a much smaller maximum penalty than those who are found neglectful. (Cohen, 4/26)
Physician Practices Increasingly Turn To Private Equity For Capital
Private-equity firms are accelerating their investments into physician practices, and expanding their portfolios into new specialty areas, such as orthopedics, urology and gastroenterology. As physician groups look to expand to serve additional patients, recruit more physicians or demand higher payment, they need funding to fuel that growth. Private equity is competing with hospital systems and large physician organizations, such as UnitedHealth Group's OptumCare, for a share of ownership. (LaMantia, 4/26)
HCA Shareholders Ax Supermajority Voting Rule
HCA Healthcare's shareholders officially axed the hospital chain's supermajority voting requirement at its annual meeting Friday. For-profit HCA's board now only needs 'yes' votes from a majority of the owners of the company's outstanding shares—previously 75%—to change the company's bylaws or provisions of its articles of incorporation, including its purpose, board size and shareholders' rights. (Bannow, 4/26)