Issue link: https://beckershealthcare.uberflip.com/i/759246
32 Healthcare M&A Volume Up 16%, Value Drops 39% in Q2 By Laura Dyrda T he number of health services merg- ers and acquisitions increased in the second quarter of 2016, but the value of the deals were down, according to a report from PwC. Here are eight things to know: 1. The volume of mergers and acquisi- tions in health services grew 8 percent in the second quarter over the first quarter of 2016 and 16 percent year-over-year. 2. There were 239 deals in the second quarter. This is the seventh quarter where the deal volume was more than 200 transactions. There were 87 deals in the long-term care subsector. 3. The deal value increased 4 percent in the second quarter compared to the first quarter of 2016 but decreased 39 per- cent year-over-year. The biggest contrib- utor was the physician medical group subsector, which made up 42 percent of the overall deal value. 4. AmSurg's $6.7 billion merger with En- vision Health led the way for the physi- cian medical groups in terms of value. 5. There were two mega deals — those exceeding $1 billion — in the second quarter, compared to five over the same time period last year. The val- ue of mega deals was down 13 per- cent sequentially and 53 percent year-over-year. 6. The breakdown of deal value is: • Physician medical groups: $6.7 billion • Long term care: $2.3 billion • Hospitals: $1.9 billion • Home health: $426 million • Behavioral care: $240 million • Managed care: $159 million 7. The breakdown of deal volume is: • Physician medical groups: 27 • Long-term care: 87 • Hospitals: 22 • Home health care: 12 • Behavioral care: 17 • Managed care: 5 8. The trading multiples trended up for labs and imaging, home health and man- aged care; the multiples were down for ambulatory care, outsourcing and acute care as well as skilled nursing facilities. The multiples for ambulatory care went from 16.1 in the second quarter last year to 13.8 in the second quarter this year. n 10 Things to Know About CMS' Final MACRA Rule By Mary Rechtoris O n Oct. 14, CMS released its final Medi- care Access & CHIP Reauthorization Act of 2015 implementation final rule, according to Healthcare Dive. Here are 10 things to know: 1. e rule will get rid of the sustainable growth rate formula, replacing it with a 0.5 percent annual rate increase through 2019. Aer this time, CMS will encourage physicians to move to either the Mer- it-based Incentive Payment System or an Alterna- tive Payment Model. Under MIPS, physicians will receive payments adjustments based on quality, cost and certified electronic health record use. 2. CMS will lower the MIPS performance thresh- old to a three-point threshold for the 2019 MIPS payment year. 3. CMS noted in its rule that physicians who have a final score of 70 or higher will be eligi- ble for an "exceptional performance adjustment" from a pool totaling $500 million. 4. CMS' final rule increased the low-volume threshold to $30,000 in Medicare Part B charges or 100 Medicare patients. 5. Patrick Conway, MD, CMS' deputy admin- istrator for innovation and quality, said nearly 380,000 providers could be exempt from MIPS, and CMS anticipated 25 percent of physicians to participate in advanced APMs in 2018. In the first year of MIPS, Dr. Conway said the agency expects 100,000 providers to participate. 6. HHS will allocate $20 million every year for five years to train and educate Medicare provid- ers in small practices, comprised of 15 or less physicians, working in underserved areas. 7. Providers can choose from four options to participate in MIPS, which, as part of MACRA's Quality Payment Program, is set to begin Jan. 1 for the performance calendar year 2017. e op- tions include: • Providers can submit "some data" for MIPS aer Jan. 1, thereby avoiding a negative payment adjustment in 2019. No incentive is earned for this option. • Clinicians can participate in the program for part of the calendar year. In the second option, providers can submit performance measures and improvement activity data across all required MIPS performance cat- egories for a reduced number of days while still qualifying for a "small" positive pay- ment adjustment. • Under the third option, providers submit data across all MIPS performance categories for the full calendar year and qualify for a "mod- est" positive payment adjustment. • Finally, the fourth option allows providers to join advanced alternative payment models in 2017. If providers sufficiently participate in advanced APMs, they qualify for a 5 per- cent incentive payment in 2019 and are ex- empt from MIPS. 8. CMS plans to add the follow entities as ad- vanced APMs next year: • Comprehensive ESRD Care - Two-sided risk • Comprehensive Primary Care Plus (CPC+) • Next Generation ACO • Medicare Shared Savings Program - Tracks 2 and 3 9. MIPS' "Advanced Care Information" section replaces the meaningful use program. In this section, CMS lowers the total number of re- quired measures from 11 to five measures. e five health IT measures include: • Security risk analysis • E-prescribing • Providing patient access • Sending summary of care • Requesting/accepting summary of care A provider can also submit optimal measures to potentially obtain a higher score. 10. CMS is taking comments on the rule for 60 days. CMS Acting Administrator Andy Slavitt said, "We're not looking to transform the Medi- care program in 2017. We're looking to make a long-term program successful." n