Becker's Spine Review

49 HEALTHCARE NEWS Hospitals Face $1.6B in Medicare Payment Cuts After Judge Dismisses Lawsuit: 6 Things to Know By Ayla Ellison A federal judge has dismissed an injunction requested by hos- pital groups and health systems to block payment cuts for drugs purchased through the 340B Drug Pricing Program. Here are six things to know. 1. In November, CMS released its 2018 Medicare Outpatient Pro- spective Payment System rule, which finalized a proposal to pay hospitals 22.5 percent less than the average sales price for drugs purchased through the 340B program. is change would reduce Medicare payments to hospitals by $1.6 billion. CMS said it would implement this policy in a budget-neutral manner by offsetting the projected $1.6 billion decrease in drug payments by redistributing an equal amount for non-drug items and services within the OPPS. 2. Less than two weeks aer the OPPS rule was released, the Amer- ican Hospital Association, America's Essential Hospitals and the Association of American Medical Colleges sued HHS to halt the payment cuts. e groups were joined in the lawsuit by three health systems: Brewer, Maine-based Eastern Maine Healthcare Systems; Detroit-based Henry Ford Health System; and Hendersonville, N.C.-based Park Ridge Health. 3. In their lawsuit, the hospital groups and health systems argued the 340B provisions of the OPPS final rule violate the Social Security Act and should be set aside. e lawsuit further alleged the 340B provi- sions are outside of the HHS secretary's statutory authority. 4. A federal judge dismissed the lawsuit Dec. 29, meaning CMS can proceed with the cuts. e judge said the lawsuit was premature, but he did not rule on the merits of the case. 5. e hospital groups and health systems may refile their lawsuit aer exploring other avenues to challenge the cuts, according to a joint statement released by the hospital groups. "Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," said Rick Pollack, president and CEO of the AHA. "We are disappointed in this decision from the court and will continue our efforts in the Courts and the Congress to reverse these significant cuts to the 340B program." 6. e Trump administration was pleased with the court's ruling. "Under President Trump, the Department of Health and Human Services has acted to lower the cost of medication for Medicare ben- eficiaries," an HHS spokesman told e Wall Street Journal. "is ruling allows that effort to move forward and advance President Trump's strong commitment to addressing the high cost of prescrip- tion drugs." n Former CFO Sues Chicago Hospital to Recoup $100k Loan By Ayla Ellison T he former CFO of Roseland Community Hospital in Chicago filed a lawsuit Wednesday alleging the hos- pital owes him $100,000, according to the Chicago Tribune. Marlo Kemp claims he loaned Roseland Community Hospital money to cover operating expenses on several occasions be- fore he left his position as CFO of the hospital in December 2017. The lawsuit alleges the hospital failed to repay him for a $100,000 loan he made to it in November 2017. Mr. Kemp wired $81,000 from his personal bank account to the hospital's payroll account Nov. 2, 2017, and he wired an additional $19,000 five days later, according to the lawsuit. The hospital gave Mr. Kemp a $100,000 check in November. However, when he attempted to deposit the check on Dec. 15, 2017, the same day he left his job at the hospital, he dis- covered Roseland Community Hospital had put a stop pay- ment on it, according to the Chicago Tribune. Mr. Kemp sued the hospital for breach of contract, fraudulent misrepresentation and unjust enrichment. n Stanford Health Care's Operating Income More Than Doubles in Q1 By Ayla Ellison S tanford (Calif.) Health Care saw revenues and operating income rise in the first quarter of fiscal year 2018, which ended Nov. 30, 2017, according to recently released bondholder documents. The health system reported revenues of $1.16 billion in the first quarter of fiscal year 2018, up from revenues of $1.07 billion in the same period of the year prior. The system's net patient revenue and premium revenue climbed 6 percent and 12 percent year over year, respectively. Stanford Health Care kept expenses in check in the first quar- ter of this fiscal year. The system reported operating expens- es of $1.08 billion, up 3.7 percent from the same period a year earlier. The system ended the first quarter of fiscal year 2018 with operating income of $74.3 million, more than double the op- erating income of $28 million it reported in the first quarter of fiscal year 2017. Stanford Health Care is part of Stanford Medicine, which also includes the Stanford University School of Medicine and Stanford Children's Health. n

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