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Gene Michalski will lead the newly merged Beaumont Health system.
Gene Michalski will lead the newly merged Beaumont Health system.

Beaumont merger creates major Detroit-area system, and other news

By Modern Healthcare
Posted: June 28, 2014 - 12:01 am ET

The boards of three health systems in southeast Michigan have given the green light to merge, creating a $3.8 billion combined organization.

Beaumont Health System in Royal Oak, Oakwood Healthcare in Dearborn and Botsford Health Care in Farmington Hills signed a definitive agreement about three months after they announced they would explore a merger. The new name of the eight-hospital system will be Beaumont Health.

The deal is significant for the three-county Detroit region because it “has been somewhat behind the curve in consolidation,” said Allan Baumgarten, a healthcare consultant who analyzes the Michigan market. Last year, Beaumont tried to merge with Henry Ford Health System, a $4.5 billion organization, but physician and cultural differences nixed the deal after six months of negotiations.

The new Beaumont system will account for about 30% of the Detroit market, based on hospital inpatient and outpatient services, where it competes with Henry Ford, Detroit Medical Center and St. John Providence Health System.

“This milestone demonstrates our mutual commitment to working together to improve quality, efficiency and value for our patients,” said Beaumont President and CEO Gene Michalski, who will lead the new system as CEO. —Bob Herman

Follow Bob Herman on Twitter: @MHbherman

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Dropped-off boxes cost system $800,000 in HIPAA settlement

In what may be one of the most expensive home deliveries in healthcare regulatory history, employees of Fort Wayne, Ind.-based Parkview Health System dropped off 71 cardboard boxes of patient medical records in the driveway of a physician's home, and now the organization is paying hundreds of thousands of dollars in penalties as a result.

Left “unattended and accessible to unauthorized persons,” the records were “within 20 feet of the public road and a short distance away from a heavily trafficked public shopping venue,” according to a news release from HHS' Office for Civil Rights. As a result, Parkview has agreed to pay $800,000 to settle potential violations of the privacy rule of the Health Insurance Portability and Accountability Act, and will adopt a corrective action plan, according to the OCR.

The office began its investigation following a complaint from a retiring physician. In September 2008, Parkview obtained the medical records of between 5,000 and 8,000 patients of a retiring physician as the system sought to buy a portion of the physician's practice and transition patients to other providers. The records were dropped off on June 9, 2009, by Parkview employees “with notice that the physician was not at home.” —Joseph Conn

Follow Joseph Conn on Twitter: @MHJConn

Obamacare means piles of unpaid bills at Ill. nursing homes

The massive expansion of Medicaid under Obamacare has had an unintended consequence in Illinois, leaving nursing homes in the lurch as the state sits on a mountain of unpaid bills.

The state doesn't know how much it owes nursing homes and other long-term-care facilities, some of which have gone a year or more without getting paid. But the figure is likely in the hundreds of millions of dollars.

About $129 million of what is owed has been approved and is waiting to be paid by the Illinois Comptroller's Office. Another estimated $185 million in bills is being processed at the Illinois Department of Healthcare and Family Services, which oversees Medicaid. But the total amount likely is much higher because of a backlog of pending applications still making their way through the system. There are about 1,100 long-term-care providers in Illinois.

People who qualify for Medicaid and need long-term care must undergo a more stringent review than typical enrollees. But the state doesn't have enough caseworkers—or the money to hire more—to get the job done in a timely manner, particularly as it is also dealing with a crush of 359,000 people who joined the Medicaid rolls because of Obamacare.

That's left nursing homes on the hook as they let residents with pending applications live in their facilities essentially at no charge while hoping that the backlog eases. —Kristen Schorsch, Crain's Chicago Business

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