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Pulse Magazine

Pulse Magazine

Healthcare Mergers & Acquisitions Strong in First Half of 2017

Revenue cycle management and healthcare IT mergers and acquisitions exceeded $14.7 billion in the first half of this year across 66 deals, according to the latest M&A Update from ACA International member company Greenberg Advisors, LLC.  “Transactions were completed in every corner of the market, large and small, and among technology and service companies alike. 

The activity mirrored the blistering pace set in the first half of 2016,” according to the report.  The latest data show that a majority of transactions in revenue cycle management and healthcare IT were under $25 million in enterprise value, but 30 percent of all transactions did exceed $50 million. This is a notable increase from the second half of 2016, when 18 percent of all transactions exceeded $50 million, according to the report.

Twenty-eight companies have made multiple acquisitions in revenue cycle management and healthcare IT since the beginning of 2016, it states.  “It is good to see the level of deal activity and interest in [accounts receivable management] rising again, creating more opportunities for owners and investors,” Brian Greenberg, CEO of Greenberg Advisors LLC, said in a news release. 

“A wide variety of buyers—from inside and outside of the ARM industry, from Europe and elsewhere—tell us that they are interested in making strategic acquisitions.” The findings for the first half of 2017 also show that 48 percent of sellers in accounts receivables management include firms focused on healthcare receivables or financial institutions.  Greenberg will be part of a panel of speakers at ACA International’s 2017 Fall Forum & Expo Nov. 1-3 at the Loews Chicago Hotel.

In “Dissecting the Deal,” scheduled for Nov. 3, Greenberg will join Harry Strausser III, Corporate Vanguard at Eastern Revenue Inc.; Michael Lamm, president/CEO of Corporate Advisory Solutions LLC; Michael Ginsberg, president/CEO of Kauklin Ginsberg Company; and Thomas Edens, president of Marion Financial Corp., will discuss how companies approach potential M&A transactions for buyers and sellers.

More information: http://bit.ly/2wHvKy4 and https://www.acainternational.org/events/fallforum2017

Uninsured Rate on the Rise for Some Consumer Demographics

The uninsured rate for certain groups of consumers divided by their age, income and access to Medicaid, is on the rise, according to The Commonwealth Fund’s fifth annual survey tracking the Affordable Care Act.  There was a significant increase in the uninsured rate for consumers ages 35 to 49; adults earning more than 400 percent of the federal poverty level ($47,520 for one person and $97,200 for a family of four); and those residing in states that have not expanded Medicaid, according to a news release on the survey.

The Commonwealth Fund’s survey included a nationally representative sample of 4,813 adults ages 19 to 64 living in the U.S.  The uninsured rate for respondents ages 35 to 49 increased from 11 percent in 2016 to 15 percent in 2017, according to the survey.  The uninsured rate for adults with incomes at or above 400 percent of the federal poverty level increased from 2 percent in 2016 to 5 percent in 2017.  Consumers in this income group are responsible for the full insurance premium and are subject to annual premium increases, according to the survey.

Lastly, the uninsured rate for consumers living in states that did not expand Medicaid increased from 16 percent in 2016 to 19 percent in 2017.  However, “despite the uptick in uninsured rates for some groups, the overall rate remained statistically unchanged from 2016 at 14 percent, representing an estimated 27 million working-age adults nationwide,” The Commonwealth Fund reports.  “In the years since the Affordable Care Act was passed, more than 20 million Americans have gained health insurance,” said Sara Collins, vice president for Health Care Coverage and Access at The Commonwealth Fund and the report’s lead author, in the news release.

Expanding Medicaid in all states, making premium subsidies accessible to more consumers, and assisting them with finding coverage on the Affordable Care Act marketplaces could remediate limits on access to coverage for the uninsured, according to the survey.  Other findings in the survey include:

Subsidies help consumers with low incomes afford premiums. While about 64 percent of consumers with incomes below 250 percent of the federal poverty level reported their premiums “were very or somewhat easy to afford,” only 34 percent of consumers with incomes above those levels provided the same response.

Cost was the primary reason consumers did not enroll in a plan.  Seventy-four percent of uninsured adults who shopped the marketplaces and didn’t enroll in a plan or obtain other coverage reported they could not find a plan they could afford.  However, 66 percent of consumers who reported they didn’t enroll in a plan because they couldn’t afford it had incomes that meet the qualifications for premium subsidies or Medicaid.

In 2017, 57 percent of consumers enrolled in plans through the marketplaces are estimated to have coverage with cost-sharing reductions that lower their deductible, copayments and coinsurance.

More information:  http://bit.ly/2wKef0d

News & Notes

Survey: Physicians Call for Reduction in Medicare ‘Regulatory Complexity’

Physician practices face too many regulatory burdens, according to the Medical Group Management Association Regulatory Burden Survey.  Nearly half of respondents said they spend more than $40,000 per FTE physician, per year, to maintain compliance with federal regulations.  http://bit.ly/2vVB6Ji

 

Mandatory Bundled Payment Models on the Chopping Block

The U.S. Department of Health and Human Services has proposed to end mandatory bundled payment programs, which pay multiple providers with a single amount payment for a complete “episode of care,” Fierce Healthcare reports.  Supporters say the bundled payments are a step toward value-based delivery models while critics say mandating their use goes too far.  http://bit.ly/2wX68Bo

 

Healthcare Providers Slow to Embrace Consumerism

Consumer demands are evolving; however, healthcare providers are not keeping up with their expectations, according to results from the Kaufman Hall’s Healthcare Consumerism Index. In fact, “fewer than one in 10 organizations are treating consumer expectations as a high priority by consistently applying and building consumer-centric capabilities,” a report on the results, “2017 State of Consumerism in Healthcare: Slow Progress in Fast Times,” states. http://bit.ly/2iB5CTO

IRS Revokes Nonprofit Status from Hospital Under 501(r)

  • October 23, 2017
  • Published in Billing

The Internal Revenue Service (IRS), for the first time since regulations for tax-exempt hospitals went into effect in October 2016, has revoked the nonprofit status for one hospital.  Nonprofit hospitals are required to comply with the Internal Revenue Service’s 501 (r) rules, including completing a community health needs assessment and meeting financial assistance policy requirements. Hospitals subject to 501(r) must also adhere to limitations on charges and follow billing and collection practices under the requirements, ACA International previously reported in the January 2016 issue of Pulse.

According to a report from FierceHealthcare, “The IRS deemed the hospital ‘egregious’ for its failure to meet the requirements, concluding that it had ‘neither the will, the resources, nor the staff to follow through’ with them.”  The IRS issued a letter to the hospital for the revocation in February 2017 and released it on their website in August.  The primary reason for the revocation, according to FierceHealthcare, is the hospital failed to make its community health needs assessment available to the public online.

The letter states: “You are a hospital organization which with the requirements of IRC section 501 (r), to conduct a community health needs assessment, adopt an implementation strategy and make it widely available to the public.”  It also states the hospital is a small rural facility without the financial or staffing resources to dedicate to meeting the requirements of 501 (r) and the community health needs assessment.

Under the Affordable Care Act, the IRS is required to review activities at tax-exempt hospitals once every three years.  Requirements, previously reported in Pulse, for a hospital to maintain its nonprofit status, set by the IRS and mandated by the Affordable Care Act, include:

Establishing written financial assistance and emergency medical care policies.

Limiting amounts charged for emergency or other medically necessary care to individuals eligible for assistance to not more than amounts billed to people with insurance for the care.

Determining if an individual is eligible for financial assistance before using extraordinary collection practices.

Conducting a community health needs assessment and adopt an implementation strategy at least once every three years.

Jan Smith, a tax senior manager in Crowe Horwath’s Healthcare practice, said in an interview with the Healthcare Financial Management Association (HFMA) that it is unlikely this action by the IRS will set a precedent for revoking nonprofit status of other hospitals.

“If hospitals are making a good-faith effort to comply, I would be surprised if the IRS would revoke their tax status at this stage of 501 (r) examinations,” Smith said in the interview with HFMA.  More information: http://ow.ly/uhRX30eAJylhttp://bit.ly/2v7F79R and http://bit.ly/2w5LMVH.

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