Becker's Hospital Review

16 CFO / FINANCE Most hospital mergers aren't anticompetitive, AHA says, but studies link deals to higher prices By Morgan Haefner T he majority of proposed hospital mergers "present no competitive is- sues" and benefit communities, the American Hospital Association wrote in an Aug. 18 letter to federal officials. However, studies have found that hospital and provid- er consolidation leads to increased prices for healthcare consumers. Six things to know: 1. In its letter to federal officials, the AHA cited a new study by Charles River Associ- ates that found health systems have been able to lower costs and improve quality through hospital acquisitions. 2. To arrive at its conclusion, Charles River Associates compared cost per admission, revenue per admission and inpatient quali- ty measures for hospitals that have been ac- quired to those that have not. 3. e study found acquisitions were associ- ated with a 3.7 percent decrease in net patient revenue per adjusted admission, or about an average $10.7 million annual decline. "While not a direct measure of negotiated hospital prices, these results suggest that third-party payors appear to benefit from lower prices at acquired hospitals," the study said. 4. Findings from the AHA's study contra- dict conclusions of other studies that have looked at hospital price and quality measures post-merger. A 2018 study conducted for e New York Times found that prices tend to climb when hospitals consolidate and market competition decreases. Additionally, a 2020 study published in e New England Journal of Medicine found hospital acquisitions led to poorer patient experience and no change in readmission or mortality rates. 5. While the AHA's study didn't find a signif- icant decline in mortality rates post-merger, "because our composite outcome measure of quality — which includes both readmission and mortality rates — continues to reflect a statistically significant improvement in qual- ity, our updated results continue to provide evidence that important indicators of qual- ity of care improve at acquired hospitals post-acquisition," according to the study. 6. e AHA's letter and study come aer the Biden administration said in July it wants to strengthen federal review of hospital deals. e AHA's goal is to meet with federal offi- cials to discuss its study results and "share our views about the benefits hospital mergers can have for communities, particularly those hit hard by the ongoing pandemic, as well as the conduct of the commercial health insur- ance industry and its impact on consumers and providers." n Allegheny Health Network sues insurer for $1B By Ayla Ellison P ittsburgh-based Allegheny Health Network and dozens of hospi- tals and physician practices are suing property insurer American Guarantee Liability Insurance Co., alleging breach of contract. The lawsuit was filed in the Court of Common Pleas of Allegheny County in June, and the insurance company has filed a motion to move the case to the court's Commerce and Complex Litigation Center, the Pittsburgh Post-Gazette reported Aug. 3. Allegheny Health Network is seeking up to $1 billion in insur- ance-covered benefits under a policy purchased from the insurer for business interruption losses tied to the COVID-19 pandemic. The health system alleges the insurer refuses to pay more than $100,000 for losses, according to the report. "AGLIC's failure to investigate or adjust the claim of AHN and claims of other policyholders in good faith has caused severe detriment to AHN and other policyholders across Pennsylvania and the na- tion and unnecessarily exposes business to severe financial hard- ship and potentially bankruptcy, threatening the employment of thousands, and damaging the economic well-being of society as a whole," Allegheny Health alleged in court documents. Other health systems have filed similar actions against property insur- ers, and courts have ruled that COVID-19 does not cause direct physi- cal loss or damage to property as required by the insurance policies. n UnitedHealthcare to end paper proof of payment for Western providers By Morgan Haefner P roviders in 12 Western states will no lon- ger be mailed paper remittance advice, or proof that an invoice has been paid, for medical claims to network healthcare profes- sionals and facilities, UnitedHealthcare said in a bulletin. The change takes effect Nov. 5. Rather than pa- per notifications, providers will be sent remit- tance advice electronically. The change affects most of UnitedHealthcare's plans, with some exemptions for specific regional and Medicare plans, as well as behavioral health plans. Providers will be able to view their remittance advice electronically through UnitedHealth- care's provider portal, Optum Pay and electron- ic data interchange. The change is in line with other actions Unit- edHealthcare has taken to shift payment pro- cesses from paper to digital. In August 2020, UnitedHealthcare said it would replace paper checks with electronic payments. n

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