Becker's Hospital Review

16 CFO / FINANCE Man Receives $52k Hospital Bill After his Backpack was Stolen in San Francisco By Ayla Ellison A man in October received a call from Seton Medical Center in Daly City, Calif., asking if he needed assis- tance paying a $52,310 bill for an emergency medi- cal procedure. The man was shocked by the call, as he had not undergone an emergency procedure and had no idea why the hospital was trying to collect from him, according to SFGate. Daly City Police Sgt. Ron Harrison told SFGate the man's troubles began when his backpack was stolen from a vehi- cle parked in San Francisco. The backpack contained several items, such as credit cards and a passport that included the man's personal information. On Sept. 2, the backpack thief used the man's identity to get a surgical procedure at Seton Medical Center. Mr. Harrison told SFGate the man will not be financially responsible for the surgery. Authorities are asking anyone with information on the per- son who stole the backpack to contact the Daly City Police. n Tenet Reports $366M Net Loss, Plans to Cut 1,300 Jobs By Ayla Ellison D allas-based Tenet Healthcare ended the third quarter with a net loss, but the 77-hospital chain is launching a $150 million cost reduction plan with an aim of improving its financial picture. According to a preliminary earnings state- ment released Oct. 27, Tenet anticipates rev- enues of $4.59 billion in the third quarter of 2017, down from revenues of $4.85 billion in the same period the year prior. Tenet said revenues from the Texas Medicaid Waiver program were $8 million lower than expected in the third quarter of this year, and revenues from Florida's Medicaid program were $2 million lower than expected due to changes with the Low Income Pool program. e company also took an estimated $30 mil- lion hit from hurricanes Harvey and Irma. e hurricanes caused Tenet to incur addi- tional expenses and miss out on revenues. Tenet reported a net loss of $366 million in the third quarter of 2017, compared to a net loss of $9 million in the third quarter of 2016. However, the company said it is taking steps to improve its financial position. "We are moving quickly and decisively to improve financial results and returns for our shareholders," said Ronald A. Rittenmeyer, executive chairman and CEO, who was ap- pointed to lead Tenet aer longtime CEO Trevor Fetter stepped down Oct. 23. As part of Tenet's turnaround plan, the com- pany is launching a $150 million enterprise- wide cost reduction initiative, which will involve renegotiation of contracts with sup- pliers and vendors, as well as significant head- count reductions. Tenet said it anticipates eliminating approximately 1,300 positions, including contractors. Although the company will realize some sav- ings from actions within its ambulatory care and Conifer business segments, about 75 percent of the savings will come from Tenet's hospital operations, including the elimina- tion of a regional management layer. Tenet expects to incur pre-tax restructuring costs of about $40 million in the fourth quarter of this year in conjunction with the cost reduc- tion initiative, with substantially all of the costs related to employee severance payments. e cost cutting plan and workforce reduc- tion are Tenet's latest moves to improve per- formance and tackle its $15 billion debt load. e company also began a board refreshment process in August, which it moved forward with at the end of October with the appoint- ment of James Bierman to the board as an independent director. Tenet's board now has 10 directors, nine of whom are independent. Tenet is evaluating strategic options, but it is unclear what those options include. In Au- gust, e Wall Street Journal reported Tenet hired banking advisors to assess several stra- tegic options, including the sale of the com- pany. However, two sources familiar with the matter told Reuters Oct. 26 the company called off the sale process to allow it to focus on securing a permanent CEO. On Oct. 27, Tenet said it is still pursuing sev- eral options, but did not specify whether sell- ing the company is still on the table. "We have and will continue to review, analyze and pur- sue all options to enhance shareholder value," said Mr. Rittenmeyer. n Anthem Launches In-House Pharmacy Business With CVS Health After Express Scripts Fallout By Morgan Haefner Indianapolis-based Anthem will establish an in-house pharmacy benefits manager called IngenioRx. Here are four things to know about the PBM. 1. IngenioRx will offer PBM services beginning in 2020 when Anthem's contract with Express Scripts expires. 2. Anthem notified Express Scripts in April it would drop the PBM after Dec. 31, 2019. The decision came during an ongoing legal battle between the two parties. 3. Anthem instead signed a five-year agreement with Woonsocket, R.I.-based CVS Health to manage prescrip- tion fulfillment and claims processing for IngenioRx be- ginning Jan. 1, 2020. 4. Anthem anticipates the deal will save it $4 billion an- nually, Reuters reports. n

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