Becker's Hospital Review

18 CFO / FINANCE Envision hires restructuring advisers, considers bankruptcy By Ayla Ellison and Kelly Gooch E nvision Healthcare, a Nashville, Tenn.-based physician staffing company owned by private equity firm KKR, is struggling to manage its $7 billion debt load and has hired lawyers and an investment bank to advise on its restruc- turing options, sources told Bloomberg. e company is looking at restructuring options, including a potential Chapter 11 bankruptcy filing, as it faces financial pres- sure from the COVID-19 pandemic, according to Bloomberg. Envision has seen a significant decline in patient volume across its practices and specialties during the pandemic. No decision has been made on a course of action for Envi- sion, and the company is still seeking to ease its debt burden by swapping $1.2 billion of unsecured notes for a new term loan. Creditors had until the end of April to decide whether to participate in the deal. e company is exploring its restructuring options aer taking several steps to improve its financial position, including hold- ing back pay for physicians, reducing salaries of senior leader- ship and furloughing nonclinical staff. e company said clin- ical pay will be reduced in services with low patient volumes, and performance-based bonuses and clinician profit-sharing will be delayed until the fall. Additionally, Envision temporar- ily suspended retirement contributions, merit increases and promotions for all employees. Shortly aer Envision implemented many of the changes, U.S. Sen. Elizabeth Warren of Massachusetts and U.S. Rep. Katie Porter of California sent a letter to Envision and other health- care staffing companies backed by private equity regarding pay and benefits. e letter, which Ms. Porter posted on Twitter, said Envision is cut- ting its physicians' pay and benefits, "all while our doctors face new financial strains of their own" amid the COVID-19 pandemic. In response, Envision cited challenges healthcare organizations are facing. "e nation's healthcare system has experienced a drastic drop in patient volume since the beginning of the COVID-19 cri- sis," wrote Envision, which has more than 40,000 team mem- bers, 27,000 of whom are physicians and clinicians. "Even as COVID-19 fills emergency departments in hot spots around the country, Envision's overall emergency volume is actually down 45 percent." Hospital and physician groups are trying to secure funds from the Coronavirus Aid, Relief and Economic Security Act and get additional aid. ough the private equity industry is lobby- ing Washington to gain access to the funds, it remains unclear whether private equity-backed companies like Envision will receive the emergency government funds. n CMS pitches 3 payment rules for 2021: 5 things to know By Ayla Ellison C MS released three proposed rules April 10, which in- clude Medicare payment updates for psychiatric facili- ties, skilled nursing facilities and hospices. Five takeaways from the proposed rules: 1. Inpatient psychiatric facility payment update. CMS pro- posed increasing the IPF payment rates by 2.4 percent in 2021 compared to 2020. The agency estimates total payments to IPFs will be about $100 million higher in 2021 than this year. 2. Skilled nursing facility payment update. CMS proposed increasing the SNF payment rates by 2.3 percent in 2021 com- pared to 2020. The agency estimates total payments to SNFs will be about $784 million higher in 2021 than this year. 3. Hospice payment update. CMS proposed increasing the hospice payment rates by 2.6 percent in 2021 compared to 2020. The agency estimates total payments to hospices would be roughly $580 million higher in 2021 than this year. 4. Wage index. CMS wants to adopt revised geographic de- lineations to calculate wage index values for inpatient psychiat- ric facilities, skilled nursing facilities and hospices. The agency also proposed a transition period for the wage index changes and a 5 percent cap on wage index decreases for 2021. 5. Comment period. CMS will accept comments on the pro- posed rules until June. n CMS delays new payment model for emergency care By Ayla Ellison C MS has delayed the start date of its Emergency Triage, Treat and Transport model from May 1 until this fall. CMS selected 205 participants in February for the five-year ET3 model. CMS said it is delaying the start date because participants now are focused on responding to the COVID-19 pandemic. The model aims to give ambulance care teams more flexibility in how they triage emergencies. The goal of the payment mod- el is to improve care quality and cut costs by reducing unnec- essary hospital visits for low-acuity emergencies. Medicare now pays for emergency ambulance services when beneficiaries are transported to hospitals, skilled nursing facil- ities and dialysis centers. Most beneficiaries who call 911 with a medical emergency are taken to a hospital emergency de- partment. Under the ET3 model, Medicare will reimburse for transport to an urgent care clinic or primary care office, or for providing care in place or using telehealth. n

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