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New Hampshire regulators block Partners acquisition over antitrust concerns – Boston Business Journal
MM 1 Sentence Summary- NH attorney general blocks Massachusetts Gen Hospital from acquiring Partners saying it will violate state antitrust laws
New Hampshire regulators block Partners acquisition over antitrust concerns
Sep 20, 2019, 1:07pm EDT
Partners HealthCare’s plan to further its expansion into New Hampshire ran into a roadblock on Friday, with the Granite State’s attorney general, Gordon MacDonald, saying the acquisition would violate state antitrust laws.
In May 2018, Partners’ flagship Massachusetts General Hospital announced that it planned to acquire Exeter Health Resources in New Hampshire. Plans called for Exeter to merge with Wentworth-Douglass Hospital, which MGH acquired in 2017, forming a new non-profit system for New Hampshire’s Seacoast region.
While the attorney general’s charitable trusts unit has been reviewing the transaction since the hospitals submitted materials in May 2019, the attorney general’s consumer protection and antitrust bureau has been conducting a private review of the transactions for over a year.
Last week, the antitrust division issued a notice of intent to halt the transaction over concerns of antitrust violations. The charitable trusts unit subsequently issued a report Friday objecting to the proposed transaction, noting that if the hospitals resolve concerns with the antitrust division, it can refile its submission to charitable trusts.
“Our most important duty is to protect the public and we will not hesitate to use the enforcement tools available to us to do so,” MacDonald said in a statement. “New Hampshire patients already pay some of the highest prices for health care in the country. Based on our investigation, we have concluded that this transaction implicates our laws protecting free and fair competition and therefore threatens even higher health care costs to be borne by New Hampshire consumers.”
In a release, hospital officials said they expect to continue conversations with the attorney general on the benefits of the transaction to ultimately resolve the concerns.
“We are optimistic that the parties can continue to have an open dialogue with the regulators or government officials about this important affiliation,” said Dr. Peter Slavin, MGH’s president. “We remain fully committed to seeing this transaction through and are confident that the Attorney General’s Office will ultimately determine that our affiliation will pass antitrust review based on the thorough review that the expert economists have completed on this proposal. We look forward to continuing to enhance quality healthcare in the Seacoast Region.”
Blue Cross puts merger on hold amid video showing CEO sideswiping tractor trailer on I-85
MM 1 Sentence Summary- BCBS and Cambia Health’s merge has been delayed because of CEO Conway’s legal trouble
Blue Cross puts merger on hold amid video showing CEO sideswiping tractor trailer on I-85
September 24, 2019 12:57 PM
Video appears to show BCBS CEO driving erratically, hitting tractor-trailer on I-85
A video provided to The News & Observer appears to show an SUV driven by Patrick Conway, president and CEO of Blue Cross and Blue Shield of NC, weaving between lanes for several miles on Interstate 85 before colliding with a tractor-trailer. By Submitted Video
ASHEBORO
North Carolina’s largest health insurer on Tuesday suspended an ongoing merger, making the announcement the same day new details emerged about its CEO’s recent driving charges.
“Blue Cross NC has decided to put its proposed strategic affiliation with Cambia Health Solutions on temporary hold,” the company announced in an email to media shortly after 3 p.m. “Blue Cross NC is committed to focusing on its customers, employees and the North Carolina communities it serves.”
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Blue Cross and Blue Shield of North Carolina and Cambia, an Oregon-based company, announced their intentions to form a partnership in March. The two companies would together cover around 6 million people and have about $16 billion in combined revenue, the News & Observer previously reported.
Blue Cross is bigger than Cambia, reporting $9.9 billion in revenue last year and covering 3.7 million people. Cambia had revenue of about $6 billion on coverage of around 2.6 million people.
Blue Cross announced the merger being put on hold on the same day that new details emerged about Dr. Patrick Conway, its president and CEO. A video provided to The News & Observer Tuesday appears to show Conway weaving between lanes for several miles on Interstate 85 before sideswiping a tractor-trailer.
Conway, 45, was charged with driving while impaired and misdemeanor child abuse after the June 22 accident. His two daughters were in the car, according to police.
Video of Conway’s car
The video, shot by a motorist on I-85 and sent to police, shows an SUV that appears to match the 2017 Cadillac listed on the report from Archdale police.
An affidavit from the Archdale officer said Conway smelled of alcohol, had bloodshot eyes and slurred speech and was unsteady on his feet. He refused a blood-alcohol test and had his license revoked for 30 days, according to court records.
According to a confidential police report obtained by WRAL, Conway denied wrongdoing and later became “belligerent” at the police station.
The report quotes Conway saying: “’You had a choice. You could have let me go. You don’t know who I am. I am a doctor, a CO of a company. I’ll call Governor Cooper and get you in trouble,’“ WRAL reported.
Cooper “was not involved in this incident in any way,” spokesman Ford Porter told The N&O.
Blue Cross didn’t comment on Tuesday’s reports. Conway’s attorney, Thomas Walker, released a statement to the N&O saying the CEO is “deeply ashamed and embarrassed” about the pain he caused family and co-workers.
“He knows his conduct was unacceptable and not consistent with who he is as a person. He has never had an incident like this before,” Walker said.
“To his credit, he immediately disclosed the incident to the Blue Cross NC Board. He stepped down from his daily duties and voluntarily and successfully completed 30 days of inpatient substance use treatment. He’s committed to continuing to handle this appropriately going forward and will do so.”
Blue Cross response
Last week, state Insurance Commissioner Mike Causey asked for Conway to be replaced by an interim president while his charges are resolved, calling them “alarming.”
He also chided the Blue Cross board for appearing to hide the arrest, saying he expected the insurer’s executive team to be more “accountable, responsible and transparent.”
Conway earned $3.59 million last year, WRAL reported.
In response, board Chairman Frank Holding Jr. said Conway had undergone a professional substance abuse assessment and attended a 30-day inpatient treatment.
“Based on detailed information shared by the facility based on Dr. Conway’s assessment and treatment, the board was satisfied Dr. Conway could continue to provide strong leadership to BlueCross NC,” Holding’s letter said.
Blue Cross “refrained” from talking publicly about Conway’s incident “out of respect for the legal process underway in Randolph County, Dr. Conway’s right to due process, and medical privacy concerns and obligations,” Holding added.
Washington commissioner’s letter
On Tuesday night, Washington’s state insurance commissioner released a letter he sent to Cambia Heath Solutions’ Board of Directors earlier that day.
In the letter, Commissioner Mike Kreidler said his office is reviewing the proposed merger of Cambia with Blue Cross. Cambia was formerly known as The Regence Group, according to its website.
Krieidler said he learned only about Conway’s June arrest on Sept. 19, the day news reports were published about the allegations. He said he learned about the arrest after Cambia CEO Mark Ganz asked for his personal cell phone number “to communicate an urgent message that could not wait until normal business hours.”
Kreidler said Blue Cross should have notified him immediately and had a “legal obligation” to inform him within two business days of “any material changes” to Conway’s biographical affidavit.
“The fact that Dr. Conway was arrested and faces serious allegations and charges is without question a material change,” Kreidler wrote.
“I am deeply troubled by your failure to communicate responsibly and transparently,” he said in the letter to the board of directors. “Both the board and CEO share the responsibility to deal with my office in a straightforward and honest fashion. Secrets are not permissible.
“Your behavior in this matter must, and will, be taken into account as my office considers the Cambia/Regence’s request for a merger,” the letter concluded.
Staff writers Zachery Eanes and Mark Schultz contributed to this story
Paul “Andy” Specht reports on North Carolina leaders and state politics for The News & Observer and PolitiFact. Specht previously covered Raleigh City Hall and town governments around the Triangle. He’s a Raleigh native who graduated from Campbell University in Buies Creek, N.C. Contact him at as*****@**********er.com or (919) 829-4870.
Major Blue Health Insurers Drop Deal to Combine
Move comes after resignation of North Carolina insurer CEO Patrick Conway
By
Anna Wilde Mathews,
Leslie Scism and
Valerie Bauerlein
Oct. 11, 2019 8:51 pm ET
Blue Cross and Blue Shield of North Carolina and Cambia Health Solutions said they were dropping plans to combine, after the resignation of the North Carolina insurer’s chief executive.
Former Blue Cross of North Carolina CEO Patrick Conway had stepped down amid fallout over an allegedly alcohol-related traffic accident. The two insurers had said they were pausing their deal on Sept. 24, as details of the June incident emerged.
Optima Health to take majority stake in Virginia Premier | Virginia Business
MM 1 Sentence Summary- Optima Health Plan takes majority ownership of MCO VA Premier and together they will serve 800k members.
Optima Health to take majority stake in Virginia Premier (Highlighted)
Virginia Beach-based Optima Health Plan will become the majority owner of Richmond-based Virginia Premier, a nonprofit managed-care organization.
Virginia Premier was founded in 1995 by VCU Health System. The Richmond-based health system will retain a 20% ownership stake in Virginia Premier. Together, Optima and Virginia Premier will serve nearly 800,000 members. Optima is a subsidiary of Norfolk-based Sentara Healthcare.
“As provider-led health plans, Optima Health and Virginia Premier share similar cultures, values and a commitment to delivering innovative services that meet the unique needs of the populations we serve,” Dennis A. Matheis, president of Optima Health and executive vice president of Sentara Healthcare, said in a statement. “Together, we will be better positioned to increase access to quality care, achieve greater efficiencies and develop new services to improve our members’ overall experience.”
Optima and Virginia Premier are two of the state’s original Medicaid managed care organizations. Company officials said Virginia Premier and Optima will continue to operate as separate entities, retaining their names and brands. Virginia Premier will maintain an operations center in Richmond and a presence in other areas in the state.
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-Feds reviewing Cuomo’s Fidelis deal : Empire Center for Public Policy
Feds reviewing Cuomo’s Fidelis deal (Highlighted)
Federal officials are reviewing the state’s expropriation of $2 billion from the sale of Fidelis Care health plan, potentially throwing a wrench into the Cuomo administration’s plans for using the money.
An Aug. 21 letter from the Centers for Medicare & Medicaid Services, recently posted on the state Health Department’s website, says the Fidelis transaction is being examined “pursuant to Section 1903(w) of the Social Security Act.”
That section of law is meant to discourage states from using certain tactics to raise revenue for their Medicaid programs. Depending on the outcome of the CMS review, the state could ultimately lose a share of its federal matching aid – which would add to the Medicaid program’s burgeoning budget crunch.
The feds’ review adds a new wrinkle to a deal engineered by Cuomo last year, which was the focus of a front-page expose in today’s New York Times.
Founded as a Catholic-affiliated non-profit health plan, Fidelis agreed in September 2017 to be bought out by for-profit Centene Corp. for a price of $3.75 billion. The state’s Catholic bishops intended to put the proceeds into a charitable foundation, but Governor Cuomo insisted that the money should go to state government instead – on grounds that most of Fidelis’ business had come from government-funded programs such as Medicaid, Child Health Plus and the Essential Plan.
Under pressure from Cuomo, the bishops and Centene agreed to pay the state $2 billion over four years. Cuomo and Legislature placed the money into a newly established “Health Care Transformation Fund,” which the governor could spend at his discretion on a broad range of health-related purposes.
The first use of the funds came in October 2018, which the Health Department announced Medicaid rate increases of 2 percent for hospitals and 1.5 percent for nursing homes – a major victory for influential interest groups that included one of the governor’s biggest campaign donors.
In the Aug. 21 letter, CMS gave approval for the nursing home rate increase but added a note of caution about the revenue source:
During our review of the proposed state plan changes, CMS became aware that the State of New York received considerable revenues related to [the] sale of assets between Fidelis Care (a non-profit insurer associated with Catholic Diocese of New York) and Centene Corporation (a for profit health insurer). Our review of these revenues is still ongoing pursuant section 1903(w) of the Act.
Section 1903(w) restricts the ability of states to finance Medicaid with revenue from health-care sources. The concern is that states will allocate a certain amount of money for Medicaid, use that expenditure to draw federal matching funds, then grab back all or most of their initial expenditure through taxes or “donations” paid by the health-care industry. If the quasi-voluntary payments by Fidelis and Centene are determined to violate this rule, the federal government is supposed to reduce the state’s allocation of federal Medicaid funding by the amount of the improper payments.
The outcome of CMS’s review is hard to predict. What’s clear is that an adverse decision would open a new hole in state finances.
For example: The state has projected that its share of the rate increases for hospitals and nursing homes would be $500 million over four years – but that assumed a roughly dollar-for-dollar match from Washington. If CMS rejects the use of Fidelis funds, and reduces aid accordingly, the state would need to put up another $500 million of its own.
Even without this complication, the Cuomo administration has been struggling to balance Medicaid’s finances. The program ran so far over budget that the state delayed $1.7 billion in payments from March to April, shifting the expense from fiscal year 2019 to fiscal year 2020. Budget reports since then have warned that Medicaid spending continues to exceed expectations, and that the state might have to make program cuts or delay further payments in the future.
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