In a decision with potentially adverse consequences for Ohio's not-for-profit hospitals, the state Department of Taxation advised against granting a tax exemption to the Cleveland Clinic's Beachwood (Ohio) Family Health and Surgery Center. The recommendation means the clinic may have to pay annual property taxes on the facility of more than $550,000. Even if the state tax commissioner accepts the department's recommendations, it's uncertain whether the decision would mean anything for the tax status of other hospitals' satellite outpatient facilities. However, for the state's more than 150 not-for-profit hospitals, the consequences of a ripple effect-the denial of more property-tax exemptions-"could be so great it may be impossible to predict the damages," a spokeswoman for the Ohio Hospital Association said. The clinic said it believes "the law supports our exemption" but did not say whether it would appeal an adverse decision to the state Board of Tax Appeals or Ohio Supreme Court.
Creutzfeldt-Jakob alert issued
Emory University Hospital, Atlanta, is notifying about 500 patients of the "remote possibility" that they may have been exposed to Creutzfeldt-Jakob disease, a fatal condition similar to mad cow disease that infects about one person per million per year worldwide. The notifications began after a patient who underwent brain surgery Sept. 10 was discovered on Sept. 15 to have tested positive for the condition. The hospital is awaiting preliminary confirmation of the diagnosis from a Cleveland specialty laboratory. In addition to 98 brain- and spine-surgery patients, the 518-bed hospital also is contacting 418 non-neurosurgical patients who underwent procedures from Sept. 15 to Sept. 27. "Although we believe the chances of an exposure are extremely small, we cannot guarantee they are zero," Allan Levey, chairman of the neurology department at Emory School of Medicine, said in a written statement. All neurological equipment was re-sterilized Sept. 15 according to the most stringent standards recommended by the World Health Organization.
Bill proposes HHS oversee GPOs
Sens. Herb Kohl (D-Wis.) and Mike DeWine (R-Ohio) introduced much-anticipated legislation aimed at more strictly controlling the business practices of hospital group purchasing organizations. The Medical Device Competition Act of 2004 would have HHS oversee the GPO industry to prevent groups from engaging in anticompetitive or unethical practices. The bill would direct HHS to write rules forbidding such behavior; bar GPOs from receiving vendor fees without HHS certification of their compliance with the rules; and limit vendor fees to 3% of the price of goods and services sold. Novation, the nation's largest GPO, said the bill threatens to raise healthcare costs for consumers, insurers and government. The Health Industry Group Purchasing Association has been trying to preserve GPOs' relative regulatory freedom in talks with the Senate Judiciary Committee's antitrust subcommittee, which began investigating GPOs more than two years ago after complaints by some small-device manufacturers.
Ardent's accounting problems
Ardent Health Services, Nashville, said its compliance program uncovered some accounting irregularities concerning the reconciliation of accounts between its Albuquerque provider network and health plan. The privately held, for-profit company said its audit committee is reviewing allegations that certain accounting policies of the company's Lovelace Sandia Health System were violated. On a conference call, David Vandewater, president and chief executive officer of Ardent, said the company couldn't comment much about the allegations because its information is preliminary. Lovelace Sandia includes a 191,000-member health plan, two physician groups and six hospitals: four acute-care, one rehabilitation and one behavioral health.
Tenet selling four Calif. hospitals
Tenet Healthcare Corp., Santa Barbara, Calif., said it is selling four hospitals in Orange County, Calif., to Integrated Healthcare Holdings, Costa Mesa, Calif. Integrated, a publicly traded, investor-owned firm formed earlier this year, said it will pay $70 million for the hospitals: 287-bed Western Medical Center-Santa Ana; 172-bed Western Medical Center-Anaheim; 114-bed Chapman Medical Center, Orange; and 178-bed Coastal Communities Hospital, Santa Ana. The companies expect the deal to close by Nov. 30. Tenet now has agreements or other plans in place to divest 15 of the 27 hospitals on a divestiture list announced in January. Integrated would gain its first hospitals in the deal.
Historic antitrust pact expires
A historic antitrust agreement settling a Florida hospital merger suit brought by the U.S. Justice Department's Antitrust Division and the Florida attorney general expired last week. The agreement, which allowed two competing not-for-profit health systems, Dunedin-based Mease Health Care System and Clearwater-based Morton Plant Hospitals, to consolidate services but not merge, was signed in 1994. Justice Department spokeswoman Gina Telamona said her office would not seek an extension to the agreement or challenge the joint venture, known as Morton Plant Mease Health Care. Beth Hardy, a spokeswoman for Morton Plant Mease Health Care, said the joint venture consolidating services between North Pinellas County's largest acute-care hospitals would "move forward with business as usual." Hardy said the agreement allowed the four hospitals to consolidate human resources and nursing services, laundry, housekeeping, medical records and food services, but keeps separate marketing, pricing, planning and managed-care contracting.