The CMS, after a stalled first attempt late last year, said it is recruiting rural hospitals for a gain-sharing demonstration project authorized under federal law. The project is part of a broader look by the CMS to see whether or not such gain-sharing programs can better align incentives between hospitals and the physicians who work for them. Overall, the focus of the project will be to link physician incentive payments to improvements in quality and efficiency, the CMS said in a July 5 posting in the Federal Register. Hospitals will be called on to provide measures to ensure that quality and efficiency of care provided to Medicare beneficiaries is monitored and improved. Rural hospitals have until Sept. 4 to apply.
An Ohio appeals court rejected a request from the Health Alliance of Greater Cincinnati to delay an order to pay legal fees to three hospitals that a trial court ruled could leave the six-hospital system. The three hospitals seeking to defect are: 470-bed Christ Hospital in Cincinnati; 217-bed St. Luke Hospital East in Fort Thomas, Ky.; and 177-bed St. Luke Hospital West in Florence, Ky. The Ohio First District Court of Appeals on July 3 declined the alliances motion for a stay pending an appeal of Judge Fred Nelsons April decision that the alliance breached its fiduciary duty to the rebelling hospitals. Nelson had instructed the alliance to pay the hospitals $4.3 million to cover the costs of the litigation but then offered to allow the alliance to post a $4.8 million bond instead as long as the hospitals were given access to their revenue to cover ongoing expenses. The trial court not only set a bond but also handed (Christ Hospital and the St. Luke hospitals) blank checks, the alliance argued in its motion. The alliance would have to pay more to stay the judgment than it would have to pay to satisfy the judgment. Christ spokeswoman Ria Davidson said in a written statement: We sincerely hope that the Health Alliance will cease litigating and work with us to move forward. The alliance was disappointed with the latest setback and had not decided what the next step would be, said spokeswoman Mary Beth Puryear.
Tenet Healthcare Corp., Dallas, purchased 41-bed Coastal Carolina Medical Center, Hardeeville, S.C., from LifePoint Hospitals, Brentwood, Tenn., for about $35 million, both companies said. Coastal Carolina was LifePoints only hospital in South Carolina. The proceeds from the sale will be used to pay down debt, LifePoint said. The company operates 49 hospitals in 18 states. Tenet owns 93-bed Hilton Head Regional Medical Center, Hilton Head Island, S.C., which is 27 miles from Coastal Carolina, but the company said that it plans to increase services at Coastal Carolina and maintain it as a full-service hospital. Tenet also said that it completed the previously announced sale of two hospitals in the Philadelphia area. Solis Healthcare, Philadelphia, paid Tenet $15.5 million in cash and a $10 million note due in December 2009 to purchase 137-bed Roxborough Memorial Hospital, Philadelphia, and 151-bed Warminster (Pa.) Hospital. Tenet has now completed the sales of 11 of 13 hospitals that it has announced plans to sell, for approximate pretax proceeds of $278 million.
A Kentucky hospital halted its Medicare-funded heart transplant program. The University of Kentuckys Chandler Medical Center in Lexington told the Associated Press that the move to stop performing heart transplants is voluntary and that it notified the CMS in a letter last week that it would be doing so. Chandler has performed fewer and fewer heart transplants over the years and failed to meet the Medicare-mandated 12 procedures annually, the AP said. In 2006, the hospital performed only three heart transplants. Meanwhile, a hospital in Washington, D.C., last month received the green light from the CMS to resume its program. Washington (D.C) Hospital Center said that a two-year, $7 million plan to boost its number of heart transplants and to prevent the program from being halted by the CMS has been a success. The 841-bed hospital has raised the number of transplants it performs to meet CMS requirements.
In a sign that points to continuing struggles by the medical transcription management company MedQuist, Amsterdam-based Royal Philips Electronics indicated it may be looking to sell its 70% ownership of the company, according to an Associated Press report. MedQuist, headquartered in Mount Laurel, N.J., underwent mandatory Securities and Exchange Commission accounting reviews in 2003 as a result of whistle-blower accusations that charged the company with improper billing practices. In 2004, the company was removed from the Nasdaq exchange for failing to file earnings reports. Until last week, MedQuist had not filed an earnings report with the SEC since 2002. Reports filed on July 5 for the years 2003 through 2005 indicated a net loss of $112 million on $353 million in revenue, according to the AP.
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