Regional News/West: Hochman promoted to president and CEO of Providence Health, and other news

RENTON, Wash.—Providence Health & Services will have another physician as its president and CEO. Dr. Rod Hochman was promoted to lead the 26-hospital Catholic healthcare system. Hochman, 57, is one of two Providence group presidents. He will succeed Dr. John Koster starting July 1. In December, Koster, 62, announced his plans to retire at the end of 2013 after serving as president and CEO since 2003. Hochman told Modern Healthcare that this month he spent a week in Montreal meeting the system's founders, the Sisters of Providence. “It's an incredible organization,” Hochman said. “It's over 150 years old and with great traditions.” Hochman's medical background is in rheumatology and internal medicine. He served as president and CEO of Swedish Health Services until last year, when the four-hospital Seattle-based system combined operations with Providence. Providence operates hospitals in Alaska, California, Montana, Oregon and Washington state. Hochman said Providence will listen to inquiries if there's a chance for expansion, but the system won't grow “just for growth's sake.” Population health is a topic of interest for Hochman, who said Providence will continue to explore new care-delivery models, including accountable care organizations. He lauded the system's existing strategic plan, which emphasizes collaboration between clinicians and administrators. “With 30 years of clinical and healthcare executive leadership experience, we are confident that Dr. Hochman is the right leader to continue our transformational work in the delivery of healthcare,” Mike Holcomb, chairman of the system's board of directors, said in a prepared statement.

—Ashok Selvam

SAN FRANCISCO—The odds are against the California hospital and medical associations as they seek to stop a 10% Medicaid pay cut from taking effect. A three-judge panel from the 9th U.S. Circuit Court of Appeals lifted an injunction against the pay cuts called for by Medi-Cal, the state's Medicaid program, on Dec. 13. So, on Jan. 28, the two organizations joined a petition to have the case reviewed by the entire court. The 9th Circuit is the nation's largest with 28 active judges. For en banc reviews, cases are heard before the chief judge and 10 randomly selected judges. En banc petitions, however, are seldom successful in the district. In 2012, the circuit received 913 petitions, considered 33 and voted to rehear 19. In 2011, it received 826 petitions, considered 28, and reheard 13. In spite of those odds, organizations from across the country—including the American Hospital Association and eight state hospital associations—have shown their support by signing on to one of two amicus briefs filed. AARP and several other groups argued in one brief that cutting reimbursement would hurt access to healthcare because, when a provider's costs exceed payment, they opt out of the Medicaid program. “Rather than analyze up-front the impact of an across-the-board reimbursement cut, California instead proposed that it would monitor for access problems later,” the brief stated. “That ostrich-like approach ignores repeated decisions from this court recognizing that Medi-Cal rate cuts force healthcare providers to limit the number of new Medi-Cal patients they accept or stop treating them entirely.”

—Andis Robeznieks

SAN DIEGO—Scripps Health agreed to buy the inpatient hospice facility and assume the remaining patients and employees of a San Diego hospice organization that filed for Chapter 11 bankruptcy protection nine days earlier. According to a Feb. 13 filing in U.S. Bankruptcy Court in San Diego, Scripps Health will pay $10.7 million for San Diego Hospice's 23-bed facility and will extend a debtor-in-possession loan of up to $5 million to help the hospice maintain operations pending the transition. The plans must be approved by the court. Earlier this month, four-hospital Scripps Health acquired a small hospice company in order to get a state license to immediately begin assuming patients from the foundering San Diego Hospice. Scripps Health has been that organization's largest referral source. San Diego Hospice has been under the lens of a federal audit since 2011. In October, Medicare began requiring prepayment review of its claims, causing severe cash-flow problems, San Diego Hospice Chief Operating Officer William Parker said in a declaration filed in the bankruptcy court. Over the past 90 days, San Diego Hospice suffered a 50% decline in patients and revenue, according to the declaration, and the company faces an annual operating loss of $19 million. “In our talks with San Diego Hospice, we both agreed that we did not want to see patients fall through the cracks during this process, and we wanted to help as many hospice employees as we could,” Chris Van Gorder, president and CEO of Scripps Health, said in a news release.

—Gregg Blesch and Rachel Landen