Centers for Medicare and Medicaid Services' Administrator Tom Scully said last week's report from the trustees of the Medicare Hospital Insurance Trust Fund will make it more difficult for hospitals to win payment relief on Capitol Hill. The report predicted the fund would run dry in 2026, or four years earlier than was projected last year, and said Medicare's inpatient hospital spending increased 9.8% last year. Speaking at the Federation of American Hospitals' annual meeting in Washington, Scully said, "That's not good. It's not good for you and it's not good for us." Scully, who led the federation from 1995 to 2001, also said hospitals must be prepared to accept that more information on quality of care will be made public and that Medicare reimbursement will be linked to quality measures. He said the CMS would build a consensus with the federation and the American Hospital Association on how to release more quality information, but that he expects the link to payments will take much longer.
HMA to acquire new hospitals
Health Management Associates, Naples, Fla., agreed to acquire two rural hospitals in Washington state from Providence Health System, Seattle, for an undisclosed sum. The deal includes 203-bed Providence Yakima (Wash.) Medical Center and 50-bed Providence Toppenish (Wash.) Hospital. It is expected to close by July 1 pending regulatory approval. Providence, which operates 19 not-for-profit hospitals in four states, said it could not afford to spend the millions of dollars needed to make improvements at the two facilities. For-profit HMA, which specializes in acquiring and upgrading rural hospitals, currently operates 44 hospitals in 14 states. In January, the company acquired 67-bed Madison County Medical Center, Canton, Miss., and earlier this month purchased land in Collier, Fla., to build a new 100-bed hospital.
CareFirst will not appeal
CareFirst Blue Cross and Blue Shield, Owings Mills, Md., will not appeal a ruling by Maryland regulators to block the insurer's sale to WellPoint Health Networks, Thousand Oaks, Calif.; however, WellPoint can appeal the decision if it chooses. The company said it has not determined what it will do. Meanwhile, several bills have been introduced in the state Legislature seeking to overhaul CareFirst's board and investigate whether the board broke laws in pursuing the WellPoint deal. Maryland Insurance Commissioner Steven Larsen ruled earlier this month that the board had not fulfilled its duty in structuring the deal between not-for-profit CareFirst and for-profit WellPoint and had acted improperly by approving bonus packages for some executives as part of the sale.