Becker's Hospital Review

14 CFO / FINANCE 'Venmo it to me': The emerging generational payment gap By Alia Paavola T he emerging popularity of mobile payment services to transfer mon- ey, such as Venmo and Cash App, has created a generational disconnect, according to e Wall Street Journal. Many young adults and teens prefer dig- ital payments over cash to reimburse friends for dinner or a movie, even if it means the payment is delayed, according to the Journal. "I don't feel that old, and I identify with younger people on a lot of things, but there is definitely a disconnect on this," Jono Hicks, a 47-year-old sales manager for a sportswear brand, said of the shi away from cash. e preference for digital options has become so popular among the younger generation that parents and grandpar- ents have been forced to download apps to compensate young relatives for chores or babysitting, according to the report. Becky Hicks, 32, told the Journal she be- gan using Venmo about a year and a half ago out of necessity. "I tried writing a check to a babysitter, and she was like, 'Um, is it OK if you Venmo it to me?'" Ms. Hicks said. As Americans move away from cash pay- ments, more people are likely going to have to adapt to using apps, according to the report. In the first three months of 2019, con- sumers used cash for 37 percent of pur- chases under $20, compared to 46 per- cent of purchases in the same period in 2015, according to a study conducted by Cash App and cited by the Journal. Many businesses also have stopped ac- cepting cash payments. n 622 hospitals sue HHS, accused of illegally allowing reimbursement cut By Kelly Gooch M ore than 600 hospitals are suing HHS, challenging the department's de- cision to allow a 0.7 percent reduction in Medicare inpatient hospital reimbursement to continue into federal fiscal years 2018 and 2019. The lawsuit, filed Nov. 19 in Washington, D.C., on behalf of 622 hospitals, claims that the decision to allow the payment cut violated a directive from Congress to not recoup more than $11 billion in overpayments by use of these payment cuts and to complete reimbursement by fiscal 2017. "There are three congressional acts at play, each concerning the application of fractions of percentages to the standardized reimbursement rate" for the hospi- tals, the lawsuit stated. The federal government "has conflated these acts to justify its unlawful conduct, which resulted in massive savings for CMS and significant financial detriment to the" hospitals, according to the lawsuit. The lawsuit contends the 0.7 percent payment cut should have ended in fiscal 2017 by law, and that HHS exceeded its statutory authority when it did not reverse the 0.7 percent reduction by fiscal 2018. The hospitals said the 0.7 percent reduction totals about $840 million per year, or about $200,000 per year on average for each hospital, effective at the beginning of fiscal 2018. The plaintiff hospitals estimate they lost about $124.4 million annually. The hospitals want HHS to make the payments due to them with interest. HHS declined to comment, citing pending litigation. n Private equity firm sets sights on Quorum Health By Ayla Ellison B rentwood, Tenn.-based Quorum Health received in December 2019 a non- binding proposal letter from KKR & Co., a New York City-based private eq- uity firm, according to a Securities and Exchange Commission filing. In a Dec. 2 letter to Quorum's board of directors, KKR said it has been in discus- sions with Quorum's management team about a potential transaction. "As a result of those discussions and the comprehensive review of the information provided to date, KKR believes that the value-maximizing path for the company, including the enterprise as a whole, along with all stakeholders, is through a re- capitalization of the company," the letter said. KKR's letter also mentioned several terms of the potential transaction, including the possibility of taking Quorum private, "partly through a buy-out of the public shares held by minority holders at a price of $1.00 per share." Quorum, the 24-hospital spinoff of Franklin, Tenn.-based Community Health Sys- tems, acknowledged receipt of the proposal in a Dec. 2 press release. "The company's board of directors will, together with its financial and legal advi- sors, carefully consider this letter as part of its ongoing engagement with its debt and equity holders," Quorum said in the release. n

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