Becker's Hospital Review

30 CFO / FINANCE Piedmont, BCBS shake hands on agreement after state ultimatum By Morgan Haefner A tlanta-based Piedmont Healthcare and Blue Cross Blue Shield of Geor- gia shook hands to resolve a weekslong contract lapse that left hundreds of thousands of patients in out-of-network limbo. The two parties' previous contract expired March 31. The handshake agreement extended the old contract until May 31, and allowed BCBSGA members who sought out-of-network treatment at Piedmont during the debacle to be billed at in-network rates. The parties also agreed to a new three-year contract, effective June 1. "Preserving the relationship between the patient and their preferred healthcare provider has been our number one goal during this entire negotiation," Pied- mont said. The decision comes after Georgia Gov. Nathan Deal gave the two sides an ulti- matum: reach an agreement by April 17 or face "executive action." During the lapsed contract, Georgia and the University System of Georgia, based in Atlanta, said they would absorb out-of-network claims for 30 days for about 600,000 state employees affected by the spat. "We sincerely appreciate Governor Deal's assistance in helping bring the parties to- gether and creating a higher sense of urgency toward resolution," Piedmont said.n ProMedica to acquire nursing home chain, creating $7B health network By Alia Paavola T oledo, Ohio-based ProMedica and Welltower, a healthcare-focused real estate investor, purchased Quality Care Properties, which is the soon-to- be owner of Toledo-based HCR ManorCare, the nation's second-largest nursing home chain, for $2.2 billion. Welltower will acquire all of the outstanding shares of QCP and ProMedica will take over and operate HCR ManorCare. Under the agreement, ProMedica will invest $400 million over the next five years into property upgrades and aquisi- tions. The partnership and ownership of HCR ManorCare will create an appoximately $7 billion healthcare system with 70,000 employees across 30 states. In April, Quality Care Properties received approval to acquire HCR ManorCare, which filed for bankruptcy in March. HCR ManorCare owns more than 500 skilled nursing and rehabilitation centers, memory care communities, assisted living facilities and home healthcare agen- cies, according to Reuters. Quality Care Properties, as the landlord of HCR ManorCare, has 257 skilled nurs- ing properties, 61 assisted living facilities, a surgical hospital and medical office buildings across 29 states. n Anthem profits up 30% despite 1M decrease in enrollment By Morgan Haefner A nthem reported strong profit growth as expenses fell slightly and revenue remained flat during the first quarter of fiscal year 2018. Here are four things to know about the insurer's financial results for the three months ended March 31. 1. Anthem reported operating revenue of $22.3 billion in the first quarter of 2018, reflecting little to no change from the same period in 2017. e insurer said the flat revenue resulted from premium in- creases that covered overall cost trends across business lines and the return of the ACA's health insurance tax in 2018. While Anthem saw revenues increase due to recent acquisitions of two Medicare Ad- vantage health plans serving Florida resi- dents, HealthSun and America's 1st Choice, these increases were offset by Anthem's re- duced footprint in the ACA marketplace, as well as declines in its local group fully insured and Medicaid businesses. 2. e insurer's ACA marketplace pullback was a large driver in a year-over-year de- crease of 1 million Anthem members to 39.6 million in the first quarter of 2018. 3. e insurer's expenses fell 1.2 percent to $20.8 billion, down from $21 billion in the first quarter of 2017. Anthem said its ben- efit expense ratio, or the amount it pays to- ward members' medical expenses, came in better than expected at 81.5 percent, com- pared to 83.7 percent in the same period in 2017. 4. Anthem ended the first quarter of 2018 with net income of $1.3 billion, up 30 per- cent from the same period a year prior. Looking forward, Gail K. Boudreaux, pres- ident and CEO of Anthem, said, "rough- out 2018, we are prioritizing investments to create a more flexible infrastructure that can quickly respond to the evolving needs of our customers and the changing health- care environment." n

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