May 31, 2024
Opioid/Substance Use Disorders | Tea Leaves
  • The Justice Department is objecting to Steward Health Care’s proposed bankruptcy financing plan, saying it needs time to review the sale of Steward’s assets — particularly Optum’s bid to purchase Stewardship Health. The proposed plan, in which for-profit Steward could borrow up to $300 million from landlord Medical Properties Trust, sets “an aggressive schedule” for sales that could undermine federal regulators’ right to review potential deals, Principal Deputy Assistant Attorney General Brian Boynton said in a Tuesday court filing. The “stalking horse” deal would essentially serve as an initial bid on Steward’s assets that can set the bar for other buyers. (Articles here and here)
  • Most of the nation’s leading nonprofit health care providers reported progress toward financial recovery during earnings for the quarter that ended March 31. However, improvements varied widely by health system, and the industry has a long way to go before it returns to profitability levels enjoyed pre-pandemic — if it fully rebounds at all. Nonprofits struggled with cost challenges, confirming reports from analysts at credit rating agencies Moody’s Ratings and Fitch Ratings that predicted expenses, particularly labor costs, would continue to vex providers in 2024. Analysts also expected this year to bring a bifurcated financial recovery for the sector, where health systems that could successfully contain costs would recover more quickly. (Article here)
  • Hospital groups are raising concerns over a proposed mandatory Medicare payment bundling program, called the Transforming Episode Accountability Model (TEAM), which the Center for Medicare and Medicaid Services (CMS) introduced last month. This program aims to implement episode-based reimbursement for various surgeries, including lower-extremity joint replacements and coronary artery bypass grafts, at select hospitals for a five-year period starting in 2026. CMS promotes TEAM as a method to enhance quality and reduce costs by fostering care coordination throughout the 30 days following a procedure. While the policy is still in development, CMS intends to gather feedback and further refine it through future rulemaking processes. The agency set a deadline of June 10 for comments despite requests for an extension from the American Hospital Association and Federation of American Hospitals. (Article here)
  • Amid ongoing concerns about rural hospital closures, lawmakers on Capitol Hill have introduced several proposals to address issues with a federal program aimed at preserving essential services in small towns nationwide. The program, designed to keep emergency departments open and inpatient beds available, has seen limited uptake from eligible hospitals. Nationwide, only about two dozen of the more than 1,500 eligible hospitals have become rural emergency hospitals since the program launched last year. At the same time, rural hospitals continue to close — 10 since the fix became available. One proposal would allow older closed facilities to reopen, while another seeks to grant rural emergency hospitals access to the 340B federal drug discount program, which provides vital financial support to struggling hospitals. (Article here)