Daily roundup: Nov. 23, 2011

Bite-sized hospital and health industry news

  • California: Several state professional medical associations, including the California Medical Association (CMA), on Monday filed a lawsuit against HHS and the state Department of Health Care Services over the recent approval of a 10% Medicaid reimbursement cut, the AP/Sacramento Bee reports. CMS earlier this year approved the cut, which state officials say will save $623 million. According to the lawsuit, the cuts did not go through the appropriate legal procedures. CMA Vice President Francisco Silva says CMS in September asked the state for more data to substantiate the cuts but approved them before receiving the data (AP/Bee, 11/21; CMA release, 11/21).
  • Massachusetts: Steward Health Care System, which has purchased 10 Massachusetts hospitals in the past year, hopes to exit the real estate business, the Boston Globe reports. The system is looking to sell 11 of its medical offices and lease back the space so it can use the proceeds to finance hospital operations. "We're selling our medical office buildings because we're not a real estate company," Steward Health spokesperson Chris Murphy says, adding," Our focus is on running hospitals and taking care of our patients" (Syre, Globe, 11/22).
  • New York: Blythedale Children's Hospital in Valhalla on Monday opened a new $65 million inpatient building. The new building includes a "flying solo" suite to train to families on continuing care, a 46-bed ICU, and a unit dedicated to traumatic brain injuries. The building—which is the first addition to the suburban hospital in 40 years—also features larger inpatient rooms and wireless patient monitoring systems (AP/Wall Street Journal, 11/21).
  • Pennsylvania: HHS on Monday exercised its rate-review authority for the first time, deeming a proposed 12% premium increase for Everence Insurance's small-business health plans excessive. Although HHS does not have the power to force rate changes, the federal health reform law empowers the agency to review rate increases and require public justification. According to HHS, Everence's 12% rate hike was excessive because it was calculated based on national data, rather than state data. The agency has requested that Everence revoke the proposed rate increase or issue refunds to consumers who already have paid. If Everence denies that request, it will have 10 days to offer public justification for the rate increase. Everence spokesperson Judy Martin Godshalk says the company has "no plans to make any changes" but is open to a discussion with federal officials (Baker, "Healthwatch," The Hill, 11/21; Norman, CQ HealthBeat, 11/21 [subscription required]; Levey, Los Angeles Times, 11/22).

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