Baptist Health, Tenet to form Alabama network, and other news

Baptist Health System and Tenet Healthcare Corp. have signed a definitive agreement to form a joint venture that will operate a healthcare network serving Birmingham and central Alabama. Under the deal, Tenet will be the majority partner and will manage the network's operations.

The deal is part of a broad effort by Tenet to form networks with other providers that allow the company to expand its use of value-based insurance contracts.

The new company will unite Birmingham-based Baptist Health's four hospitals—Princeton Baptist Medical Center, Birmingham; Citizens Baptist Medical Center, Talladega; Shelby Baptist Medical Center, Alabaster; and Walker Baptist Medical Center, Jasper—with Tenet's Brookwood Medical Center in Birmingham. Together, the new system will have 77 outpatient and physician-office facilities, including clinics delivering primary and specialty care; 1,500 affiliated physicians and 7,300 employees.

The systems announced they were exploring an agreement last December, and the transaction is expected to be completed in the third quarter of 2015. —Michael Sandler

The Obama administration and Florida have reached an agreement in principle to continue funding the state's hospital low-income pool for two more years but at a much lower level.

Florida will receive $1 billion this year—about half of what it has been receiving—and $600 million for 2016-17. The federal government still must wait until the end of a public review to issue its final ruling. The fight over the funds tore apart Florida's regular legislative session in April over proposals to expand Medicaid coverage and prompted Republican Gov. Rick Scott to sue the federal government, contending the administration's move was an attempt at coercion.

Scott credited his lawsuit with helping to extend the federal funding. He also used the opportunity to criticize hospitals relying on the funds. Scott in recent months has become increasingly adversarial toward hospitals that receive tax dollars. He has tried to convince lawmakers that hospitals are not as bad off financially as they maintain. Some hospitals have said they would be forced to shut down or cut services without the funds. —Associated Press