FTC probing Va. merger
Modern Healthcare has learned the Federal Trade Commission is investigating a July 2001 sale involving a Bedford, Va., hospital owned by nine-hospital Carilion Health System in Roanoke, Va., (See related story, p. 8). Carilion sold half of its stake in 160-bed Bedford Memorial Hospital to a rival system, Centra Health, which owns the only two acute-care hospitals in nearby Lynchburg, Va. Both Centra and Carilion operate western Virginia systems in adjoining markets that face little or no competition and are headquartered about 50 miles apart. The Bedford hospital is located between them. Carilion owned the hospital, but Centra had the dominant primary-care practice in the area. No federal regulatory agencies challenged the deal. Carilion spokesman Eric Earnhart did not return phone calls seeking comment. The U.S. Justice Department unsuccessfully challenged Carilion's controversial 1998 purchase of Community Hospital of Roanoke Valley. Carilion merged that hospital with its own Roanoke Memorial Hospital. It was the first not-for-profit hospital merger challenged by the Justice Department on antitrust grounds.
DMC awarded $50 million
Michigan lawmakers agreed to provide the seven-hospital Detroit Medical Center with $50 million in new funds, mostly Medicaid. A DMC spokeswoman said the funding would come with conditions, which are being negotiated in closed meetings. The system has "agreed to keep our conversations confidential until further notice," she said. The money is intended to get DMC through one more year, while a long-term solution to its financial problems is developed. A working group is scheduled to submit recommendations to lawmakers July 29, a spokeswoman for the governor's office said. Earlier this year, DMC President and Chief Executive Officer Arthur Porter said the system would close two hospitals and lay off hundreds of workers unless lawmakers found more money to offset its costs as the state's largest provider of charity care. DMC provided $130 million in uncompensated care last year and provides 25% of all care paid for by the state Medicaid program, Porter said. The system has lost nearly $400 million over the past five years.
Medicare reform months away
A compromise Medicare reform bill may not be ready for President Bush until October, legislative aides said at a news briefing. Deep differences in the House and Senate bills and between Democrats and Republicans are prolonging negotiations, according to aides for Sens. Bill Frist (R-Tenn.) and Tom Daschle (D-S.D.) and the House Energy and Commerce Committee. One sticking point is a provision in the Senate bill that would have Medicare pay for prescription drug coverage in areas without at least two private health plans that have agreed to offer the benefit. The House bill would have the government provide incentives for health plans to enter such areas.