Becker's Hospital Review

16 CFO / FINANCE Trinity Health tried to sell struggling Chicago hospital for 18 months, papers show By Molly Gamble D ocuments filed with regulators in July show Trinity Health tried for 18 months to sell Mercy Hospital and Medical Center in Chicago or find it a partner, according to WBEZ. There were no takers. The South Side hospital will close between February and May 2021. Livonia, Mich.-based Trinity purchased Mercy Hospital in 2012 and has in- vested more than $236 million in infrastructure improvements and short- term operating needs. In a letter filed with Illinois health regulators, Mer- cy disclosed that Trinity had been in contact with more than 20 potential partners for the 292-bed hospital. "Ultimately, none expressed an interest in Mercy Hospital," the medical cen- ter's attorney Edward Green wrote in the letter, Kristen Schorsch reported for WBEZ. Mercy experiences $4 million monthly operating losses. A sale or partnership wasn't the only lifeline Mercy dialed before confirm- ing its 2021 closure July 29. The nearly 170-year-old hospital joined forces in early 2020 with three other South Side hospitals to create an independent health system with a robust outpatient care footprint. The hospitals called off the deal in late May after state funding for the $1.1 billion project fell through. Mercy has plans to develop an outpatient setting that treats 50,000 pa- tients a year, but community activists have said the loss of an acute care hospital will create a medical desert on the city's South Side and exacer- bate healthcare disparities, according to ABC 7 News. n Hospitals to get Medicare pay hike for care of COVID-19 patients By Ayla Ellison H ospitals received a payment boost on Sept. 1 for caring for Medicare beneficiaries diagnosed with COVID-19. A positive COVID-19 labora- tory test must be documented in the patient's medical record for the hospital to receive the higher payment, CMS said Aug. 17. Four things to know: 1. Hospitals received a 20 percent Medicare pay bump for patients di- agnosed with COVID-19 starting in September, according to Bloomberg Law. 2. To receive the payment boost, the COVID-19 test must be taken within 14 days of the hospital admission. Only the results of viral testing that are consistent with CDC guidelines can be used. "In the rare circumstance where a viral test was performed more than 14 days prior to the hospital admission, CMS will consider whether there are complex medical factors in addition to that test result for purposes of this documentation require- ment," CMS said. 3. Tests performed by an entity other than the hospital, such as a local government-run testing center, can be manually entered into the patient's medical record. 4. CMS may conduct post-payment medical review to confirm a positive COVID-19 laboratory test. If there isn't a positive test in the patient's med- ical record, CMS will recoup the 20 percent payment increase. n Providence posts $538M loss, lays out 3-part strategic plan By Ayla Ellison P rovidence, a 51-hospital system based in Renton Wash., received $651 million in federal grants in the first half of this year, but it wasn't enough to offset the system's losses tied to the COVID-19 pandemic. e health system reported revenues of $12.5 bil- lion in the first six months of this year, down from $12.6 billion in the same period a year earlier, ac- cording to financial documents released Aug. 17. ough the health system reported a rebound in patient volumes aer the suspension of nonemer- gency procedures in March and April, net patient service revenue was down 10 percent year over year. Providence's expenses also increased. For the first two quarters of this year, the health system re- ported operating expenses of $12.7 billion, up 3 percent year over year. e increase was attribut- ed to higher labor costs and increased personal protective equipment and pharmaceutical spend. Reduced patient volumes combined with in- creased costs drove an operating loss of $221 million in the first half of this year. In the first half of 2019, Providence reported operating in- come of $250 million. Aer factoring in nonoperating items, Provi- dence ended the first six months of 2020 with a net loss of $538 million, compared to net income of $985 million in the same period of 2019. To help offset financial damage, Providence re- ceived $651 million in federal grants made avail- able under the Coronavirus Aid, Relief and Eco- nomic Security Act. "We knew we were in for a marathon the moment we admitted our first patient with COVID-19 sev- en months ago," Providence President and CEO Rod Hochman, MD, said in an earnings release. "Our caregivers have been on the front lines ever since, and we are incredibly proud and grateful for all they are doing to serve our communities during the greatest crisis of our lifetime." In its earnings release, Providence mapped out a three-part plan for the future. As part of that plan, the system said it is focused on improving testing capacity and turnaround times and ad- vancing clinical research and best practices in the treatment of COVID-19. e system is also re- vising its operating model and cost structure. n

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