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46 FINANCE FTC Suspends Challenge of West Virginia Hospital Merger By Ayla Ellison T he Federal Trade Commission has halt- ed its challenge to the merger between Cabell Huntington (W. Va.) Hospital and Huntington-based St. Mary's Medical Center while it reviews a new state law, ac- cording to e Herald-Dispatch. Cabell Huntington and St. Mary's began merger talks in 2014, and the FTC autho- rized action to block the deal last November. e FTC alleges the merger would substan- tially lessen competition for patients and in- clusion in health plan networks. To get around the FTC's challenge, West Virginia lawmakers proposed legislation al- lowing hospital deals approved by the West Virginia Health Care Authority and the state's attorney general to avoid state and federal antitrust laws. West Virginia Gov. Earl Ray Tomblin signed the legislation into law earlier this month. At the request of all parties, a federal judge has removed the FTC's complaint against the hospitals from adjudication for 30 days to give the FTC time to evaluate the new state law. The FTC will then decide whether to proceed with its challenge to the merger, according to the Herald-Dispatch. The next hearing in the case is slated for April 25. n Banner Health Operating Income Plummets 51.2% By Ayla Ellison B anner Health reported an increase in revenue in 2015, but rising expenses and a loss on its accountable care orga- nization caused the Phoenix-based system's bottom line to dip. Banner reported revenues of nearly $7 billion in 2015, up from $5.4 bil- lion the year prior. The system's financial boost was partially offset by rising expenses. Banner posted expenses of $6.8 billion in 2015, up 33.3 percent from $5.1 billion in 2014. Banner ended 2015 with operating income of $128.4 million, down sig- nificantly from $263.3 million the year prior. Banner Health Network, the system's ACO, recorded an operating loss of $49.3 million in 2015, down from operating income of $7.2 million in 2014. Banner officials said the de- cline was attributable to several fac- tors, including significant out-of-net- work utilizations and losses on the BHN full risk contract with MediSun/ Blue Advantage plan. Banner recorded net income of $83.7 million in 2015, down from net income of $238.5 million in 2014. n Highmark Health Posts $565M Operating Loss in 2015: 9 Things to Know By Ayla Ellison P ittsburgh-based Highmark Health, the parent company of insurer Highmark and Allegheny Health Network, recorded an operating loss of $565 million in 2015, compared to an operating loss of $178 million the year prior. Here are nine things to know about Highmark's most-recent financials. 1. Highmark reported 5 percent growth in operating revenues year over year to $17.7 billion in 2015. 2. Its gains were offset by a $655 million loss on its government health plan business. Similar to other health insurers, Highmark officials said its Affordable Care Act exchange products sustained a high level of medical costs in 2015. The company reported a $34 million loss on its government health plan busi- ness in 2014. 3. Commenting on the loss, Highmark Executive Vice President and CFO Karen Hanlon said, "We are committed to stabilizing our ACA line of business and early 2016 indicators are positive as we have already achieved what we believe is an appropriate level of membership in our ACA individual plans." 4. Highmark recorded a gain of $217 million on its commercial health plans in 2015, up 538.2 percent from $34 million in 2014. 5. Highmark officials said the company experienced an overall member retention rate of 95 percent across all markets last year. Highmark and its subsidiaries and affiliates provide health insurance to 5.2 million members in Pennsylvania. 6. On the provider side, Allegheny Health Network recorded a $36 million loss in 2015, compared to a loss of $37 million in 2014. The system saw an increase in inpatient and outpatient volumes last year. 7. Highmark's IT services company, HM Health Solutions, reported an operating gain of $7 million in 2015, up 75 percent from the year prior. 8. After accounting for $294 million in investment income and $249 million in net assets from the acquisition of Blue Cross of Northeast Pennsylvania, High- mark ended 2015 with a net loss of $85 million, compared to a net loss of $83 million the year prior. 9. "Highmark Health is pleased with our strong, consistent year-over year finan- cial performance despite the impact of the ACA population," said David Holm- berg, president and CEO of Highmark. n