Cone Health joins systems offering insurance plans

Cone Health joins the ranks of health systems entering the insurance business as it begins to market its new Medicare Advantage plan.

The Greensboro, N.C.-based system, a two-hospital group whose flagship facility is 1,004-bed Moses H. Cone Memorial Hospital, submitted its application to the CMS in February. The Medicare Advantage product represents its first venture into the insurance market.

Cone Health began marketing and advertising the plan last week and will start enrolling patients on Oct. 15. Coverage will begin Jan. 1.

The system is entering the insurance market through its partnership with North Texas Specialty Physicians, which already has an insurance business known as Care N' Care Insurance Co. The Medicare Advantage plan, HealthTeam Advantage, will operate as a joint venture between Cone Health and Care N' Care.

Terry Akin, Cone Health's president and CEO, described the entry as a small step into the insurance industry. He declined to comment on expected enrollment numbers but said, “I don't think we're talking tens of thousands, or hundreds of thousands.”

The move builds on the system's other forays into risk-based payments. Its accountable care organization, Triad Healthcare Network, is participating in the Medicare Shared Savings program. Triad saved $21.5 million in its first year and earned 50% of that in shared savings, said Steve Neorr, president of HealthTeam Advantage. —Beth Kutscher

Baltimore-based University of Maryland Medical System improved its financial performance in the past year, despite the state's first-in-the-nation experiment with hospital global budget caps.

The system reported an operating surplus of $118.1 million on $3.4 billion in revenue for the year ended June 30, compared with an operating surplus of $48.2 million on $3 billion in revenue last year. Its operating margin jumped to 3.5% from 1.6%.

The system's improvement in top-line revenue was largely because of its December 2013 merger with Upper Chesapeake Health System, whose addition led to an overall 3.4% increase in admissions year over year. But inpatient volume remained flat or declined at most of the University of Maryland's 11 hospitals, while outpatient visits rose 9.8%.

The new hospital global budget payment model in Maryland, initiated in January 2014, is designed to control healthcare spending. It caps inpatient and outpatient revenue growth at 3.58% annually. The fixed payment is adjusted for patient volume changes, inflation and other factors, but aims to incentivize hospitals to reduce costs instead of attracting new admissions.

The University of Maryland did take a hit to its bottom line from the volatility in the financial markets, which led to investment income losses. It ended the year with $95.1 million in total surplus for 2015, compared with a total surplus of $225.9 million in the previous year. —Beth Kutscher

Patients in Washington, D.C., have filed a lawsuit against two area hospitals alleging they were charged thousands of dollars to obtain medical records.

The plaintiffs have filed suit against MedStar Georgetown University Hospital and George Washington University Hospital, contending the hospitals violated District of Columbia consumer protection laws by charging exorbitant amounts to obtain medical records.

According to the suit, patients in D.C. are entitled to a copy of their medical records within 30 days for a reasonable fee. Federal law allows a provider to charge for labor costs for copying and preparing a summary, the cost of paper and use of electronic media and postage costs. No other fees may be charged.

A couple in the lawsuit requested an electronic copy of their child's birth record from MedStar Georgetown. The other patient requested an electronic health record for treatment he received. The lawsuit alleges that the couple and the individual patient were charged a total of $1,167.88 and $1,559.26, respectively.

HealthPort, MedStar Georgetown's third-party vendor, allegedly informed the couple that records were available only on paper. In both cases, HealthPort charged a copying fee of 76 cents per page, a basic fee of $22.88 and a shipping and handling fee of $16.38.

HealthPort did not respond to an interview request. MedStar Georgetown's legal counsel said the hospital had offered an alternative to providing electronic copies, “which was not acceptable to (the patients),” according to the suit.

Also listed in the suit was a man who received care from George Washington University Hospital and was hit with similar fees after requesting an electronic copy of his health record. He says he received a bill for $430.20, including copying fees for more than 500 pages of records. —Michael Sandler