CommonSpirit Health is making progress on realigning its business model to focus on ambulatory care and improved payer relationships, executives said Thursday.
During a call with investors, the Chicago-based health system laid out where its strategy stands as it nears the end of its fiscal 2024.
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CommonSpirit operates more than 2,200 care sites across 24 states. Here's what executives had to say about those priorities.
1. They aren't interested in Steward Health Care
Arizona is one of CommonSpirit's most important markets, but the health system does not anticipate buying Steward's assets in the state, executives said. The facilities are unlikely to match what CommonSpirit looks for in terms of earnings potential and market position.
Dallas-based Steward, which filed for Chapter 11 bankruptcy protection in May, operates four hospitals in Arizona. Steward is looking to sell all its assets across eight states this summer as part of the bankruptcy process.
CommonSpirit acquired five Utah hospitals, plus dozens of clinics, imaging and urgent care centers, from Steward about a year ago.
2. They want to exit lower-performing markets
"We are trying to be very intentional," Chief Financial Officer Dan Morissette said. "We have a few markets, a few areas, that we simply believe that they'd be better served by another party for a variety of reasons. In some cases, we don't have the provider network to support our facilities. In some cases, we don't have the facilities appropriate to make sure that [CommonSpirit is] successful."
In February, CommonSpirit and UCSF Health announced a definitive agreement under which UCSF Health would acquire Saint Francis Memorial Hospital and St. Mary’s Medical Center, both in San Francisco. The transaction is expected to close in the coming months, Morissette said.
3. Ambulatory care investments will continue
Morissette said the health system continues to invest in its outpatient network, including ambulatory surgery centers, behavioral health and home care.
The health system opened 44 ambulatory care sites, including primary care offices, specialty care clinics and an ambulatory surgery center, in the first nine months of its fiscal 2024, which ends June 30.
4. $1 billion in payments are expected
CommonSpirit is expecting one-time payments totaling about $1 billion over the next six to 12 months.
The payments stem from multiple programs: 340B settlement payments from the Centers for Medicare and Medicaid Services to remedy underpayments in past years; reimbursements from the Federal Emergency Management Agency related to the COVID-19 pandemic; employee retention credits from the Internal Revenue Service; and insurance payments tied to its 2022 cyberattack.
5. Working with payers on claims denials is key
Morissette said one of CommonSpirit's key initiatives is working with payers and revenue cycle vendors to address claim denials, contract adherence and timely payments.
"We have a range of revenue and cost efforts to help us achieve needed performance improvement," he said. "It's critical that we get paid appropriately for the care we provide."