Becker's Spine Review

33 HEALTHCARE NEWS Healthcare Bankruptcies More Than Triple in 2017 By Ayla Ellison R egulatory changes, the rise of high-deductible health plans and advances in technology are a few of the factors that have taken a toll on healthcare companies' finances, and these challenges may lead many hospitals and other medical companies to restructure their debt or file for bankruptcy in the coming year, according to Bloomberg. Although hospitals are expected to face financial challenges in the year ahead, many healthcare companies are already struggling. According to data compiled by Bloomberg, healthcare bankruptcy filings more than tripled in 2017. Health- care bankruptcies are on the rise as filings across the broader economy have fallen since 2010, according to the report. The challenges in the healthcare sector may hit rural hospitals the hardest due to the reduction in Disproportionate Share Hospital payments. The ACA calls for annual aggregate reductions to DSH payments from fiscal year 2014 through fiscal year 2020. Subsequent legislation delayed the start of the reductions until fiscal year 2018, which began Oct. 1, 2017, and pushed the end date back to fiscal year 2025. David Neier, a partner at Winston & Strawn, told Bloomberg the cuts to DSH pay- ments may "single-handedly throw hospitals into immediate financial distress." n At Least 26 Nonprofit Hospitals at Risk of Bankruptcy: 5 Things to Know By Ayla Ellison M any nonprofit hospitals across the nation are facing financial challenges, and they may soon face higher borrowing costs. Here are five things to know about the financial pressure nonprofit hospitals are facing. 1. Nonprofit hospitals and health systems issue tax-exempt bonds to finance capital projects. Under the House Republicans' tax plan, interest on newly issued private-activ- ity bonds would no longer be tax-exempt. 2. is change would reduce financing op- tions for some healthcare organizations by raising the cost of capital, according to S&P Global Ratings. "From a credit perspective, higher borrowing rates can lead to budget imbalances, a challenge for all, and a hall- mark of struggling credits," said S&P. 3. e move to eliminate tax exemptions for new private-activity bonds is not in- cluded in a bill passed by Senate Republi- cans on Dec. 2. 4. e threat of higher borrowing costs comes as nonprofit hospitals' finances are already under pressure. According to data compiled by Bloomberg, at least 26 nonprof- it hospitals across the nation are already in default or distress. ese facilities have no- tified bondholders of financial challenges, such as having too little cash on hand, that make bankruptcy more likely, according to the report. 5. Many of the nonprofit hospitals under the most financial pressure are in rural areas with "older, poorer and sicker" patient populations, Margaret Elehwany, vice pres- ident of government affairs and policy at the National Rural Health Association, told Bloomberg. She said approximately 44 per- cent of rural hospitals operate at a loss. n Colorado Hospital Charged $1,877 to Pierce a Child's Ears By Ayla Ellison M argaret O'Neill's 5-year- old daughter underwent an outpatient procedure at Children's Hospital Colorado in Aurora two years ago. Several months after the operation, Ms. O'Neill was shocked when she received a bill for $1,877 for "operating room services" related to her daughter's ear piercing, according to ProPublica. The band of tissue that connected Ms. O'Neill's daughter's tongue to the floor of her mouth was too tight, and Ms. O'Neill brought her to Children's Hospital Colorado to have the tissue snipped. She was surprised during a preoperative visit when the surgeon offered to pierce her daughter's ears while she was under anesthesia for the operation, according to the report. The surgeon told Ms. O'Neill to bring earrings to the hospital on the day of the operation if she wanted to have her daughter's ears pierced. Ms. O'Neill brought in the earrings, assum- ing it was a free service. Months after the operation, Ms. O'Neill received a bill from the hospital that in- cluded a $1,877.86 charge for ear pierc- ing-related "operating room services," which her insurer would not cover. After complaining to the hospital multiple times about the bill, Ms. O'Neill said the hospital told her to pay the bill or it would be sent to collections, according to ProPublica. Surgical ear piercing is an example of unnecessary treatment, and it is an un- common service for hospitals to offer. The Health Care Cost Institute, a non- profit that maintains a database of com- mercial health insurance claims, could only find about two dozen possible cases of surgical ear piercing a year in its billing data, according to the report. Children's Hospital Colorado declined to comment to ProPublica about the ear piercing. n

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