Becker's Hospital Review

18 CFO / FINANCE 6 hospital mergers called off in the last year By Ayla Ellison T here have been several hospital mergers that, at some point in their life- time, were called off. Below are six that were abandoned between May 2020 and April 2021. 1. Sioux Falls, S.D.-based Sanford Health confirmed to Becker's Hospital Re- view in March that it is no longer pursuing a merger with Salt Lake City-based Intermountain Healthcare. Sanford and Intermountain announced in Oc- tober they had signed a letter of intent to merge, with completion of the deal expected in 2021. e deal was officially canceled aer Sanford indefinitely suspended merger discussions in early December because of the abrupt exit of its longtime president and CEO, Kelby Krabbenho. e combined system would have operated 70 hospitals and employed more than 89,000 people. 2. Macon, Ga.-based Atrium Health Navicent and Warner Robins, Ga.- based Houston Healthcare abandoned their proposed merger in February. e Federal Trade Commission announced March 3 that commission staff recommended challenging the transaction aer determining it would elim- inate competition and raise healthcare costs in central Georgia. e com- mission voted 4-0 to disclose the investigation and close it aer the deal was called off. 3. Advocate Aurora Health, which has dual headquarters in Milwaukee and Downers Grove, Ill., and Southfield, Mich.-based Beaumont Health called off their merger plan Oct. 2, about five months aer signing a letter of intent to combine. e proposed merger faced criticism from some Beaumont phy- sicians, nurses and donors. In August, the Beaumont board of trustees con- firmed it would delay a vote on the planned merger. e trustees decided to postpone the vote aer seeing the results of a survey, completed by 1,500 of the system's 5,000 physicians, that revealed a lack of confidence in Beaumont's leadership and concerns about its proposed merger with Advocate Aurora. e merger of Beaumont and Advocate Aurora would have created a $17 bil- lion system with 36 hospitals. 4. County officials overseeing Ventura (Calif.) County Medical Center ended merger talks with San Francisco-based Dignity Health in July aer leaders from both parties deemed an affiliation too risky. County Health Care Agency Director Bill Foley said Dignity officials considered it a risk to take on public hospitals, while county managers were concerned they would give up control but still face risk for buildings and finances. County officials were also con- cerned VCMC would lose its designation as a public hospital under either a lease or a contract with Dignity, which would put roughly $150 million in annual funding at risk. 5. Southfield, Mich.-based Beaumont Health called off a proposed merger with Akron, Ohio-based Summa Health in late May of 2020. They ended talks about five months after signing a definitive agreement, under which Summa Health would have become a subsidiary of Beaumont. The pro- posed deal, which had already received all necessary regulatory approvals, would have created a nonprofit system with 12 hospitals and $6.1 billion in annual revenue. 6. Chicago-based Advocate Trinity Hospital, Mercy Hospital and Medical Center, South Shore Hospital and St. Bernard Hospital signed a letter of intent in January 2020 to combine into a single health system and build at least one new hospital and several community health centers. e hospitals called off the deal in late May of 2020 aer government funding for the $1.1 billion plan fell through. n Hospitals get 1st CMS warning on price transparency failure By Alia Paavola C MS started issuing its first round of warning letters to hospitals not in compliance with the hospital price disclosure rule, a CMS spokesperson confirmed to Becker's Hospital Review May 5. The CMS final rule, which took effect Jan. 1, aims to make hospital pricing information read- ily available to patients to compare costs and make more informed healthcare decisions. To aid with this, hospitals in the U.S. are required to post both a machine-readable file with the negotiated rates for all items and services and display the prices of 300 shoppable services in a consumer-friendly format. CMS said it began proactive audits of hospital websites and reviewed complaints submitted to its website after Jan. 1, but didn't issue its first round of warning letters until April. Hospitals will have 90 days to address the find- ings in the noncompliance letter from CMS. The agency will then re-review upon expiration of that 90-day window. If the hospital is still not in compliance, it may receive a second warning letter or it may be sent a request for a corrective action plan, CMS said. The price transparency rule indicates that if a hospital is noncompliant, the agency may request a corrective action plan, assess a civil monetary penalty of up to $300 per day or pub- licize the penalty on a CMS website. CMS said that while the rule says that once a monetary penalty is issued, it will make the name of the hospital public on its website, "releasing this information prematurely could identify hospitals that have already taken cor- rective actions and come into compliance after issuance of a warning letter." As a result, "CMS does not make the list of non- compliant hospitals receiving warning letters available to the public," a CMS spokesperson told Becker's. n

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