Latest / Becker’s Healthcare Podcast / Medicaid Challenges and Rural Hospital Deal Trends with Alan Condon

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Medicaid Challenges and Rural Hospital Deal Trends with Alan Condon · Becker’s Healthcare Podcast

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  - The strategic agenda facing hospital and health system
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  - leaders right now is not a short list.
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  - Growth in a consolidating market, sustainable margins in
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  - a reimbursement environment that rarely moves in your
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  - favor,
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  - a tech investment cycle that demands both urgency
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  - and discipline,
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  - and a workforce story that is still being
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  - written.
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  - Eker's fourteenth annual CEO CFO roundtable brings together
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  - more than 1,500 executive level attendees and nearly
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  - 400 speakers across four days of sessions that
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  - are designed to help c suite leaders benchmark,
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  - pressure test, and sharpen their priorities.
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  - Not in the abstract, but against the real
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  - decisions they'll face heading into the next year.
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  - It's the kind of event you leave with
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  - a clear sense of where you stand and
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  - what comes next.
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  - So join us November second through the fifth
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  - at the Hyatt Regency in Chicago, and come
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  - ready to do the hard thinking.
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  - Register on our events page at beckershospitalreview.com
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  - by clicking on the events tab in the
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  - upper right.
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  - This is Scott Becker with the Beckers Health
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  - Care Podcast.
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  - I am thrilled today to be joined by
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  - brilliant journalist and editor in chief, Allan Condon.
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  - And Allan joins us regularly to talk about
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  - stories that he's watching in health care, an
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  - extremely busy time it seems in sort of
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  - business trends in health care, health care systems,
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  - some performing really well, some really struggling, and
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  - a lot more.
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  - Alon, let me just turn it to you.
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  - What are a few of the key stories
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  - that you're watching to keep an eye on
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  - currently?
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  - Yeah. Absolutely. I was glad to be on
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  - with you, Scott. So I think
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  - two two key stories I'd love to touch
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  - on today for our listeners and the vector's
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  - audience.
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  - First and foremost,
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  - we saw yesterday, on Monday, June 29, 25
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  - states and Washington, DC, the Democratic governors and
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  - attorneys general from 25 states and Washington, DC
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  - sued the Trump administration
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  - over
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  - CMS's
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  - interim final rule, which is, of course, implementing
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  - Medicaid
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  - work requirements.
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  - Q2 story here. I think no doubt this
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  - will play out over the next couple of
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  - months in the court system and whatnot, but
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  - essentially, this lawsuit for for hospital leaders listening
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  - to this call challenges CMS rule, which outlines
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  - how states must implement new community engagement requirements
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  - under, of course, h r one, the one
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  - big deal for bill for the other name
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  - of that bill.
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  - So the law also essentially argues that the
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  - rule illegally
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  - narrows
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  - exemptions for Medicaid
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  - braille Medicaid beneficiaries and creates administrative barriers that
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  - cause eligible people to really lose coverage.
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  - So we we know we've covered this acknowledging
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  - of Becker's over the last couple of months
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  - that under HR one,
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  - certain Medicaid expansion enrollees must work,
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  - attend school,
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  - volunteer, or participate in other qualifying activities to
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  - maintain that
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  - Medicaid
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  - coverage. So CMS has said that this rule
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  - is designed to prioritize
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  - coverage for Medicaid's most vulnerable population
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  - and promote economic economic
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  - stability,
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  - self sufficiency,
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  - independence, whatnot.
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  - States, on the other on the other end,
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  - these 25 democratic led states argue that this
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  - rule will, quote unquote, disproportionately
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  - affect older adults that are not yet eligible
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  - for Medicare
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  - and Medicaid and people with serious conditions.
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  - In addition,
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  - plays really further strain on safety net providers,
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  - hospitals,
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  - know that we'll see a big increase in
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  - uncompensated
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  - care,
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  - further strain safety net of rural hospitals,
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  - many of which are already under significant strain
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  - at the moment. There's a ton more in
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  - this. Those are the key key points of
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  - the pushback from state.
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  - Essentially,
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  - they're arguing that they they would like to
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  - block the challenge provisions that CMS has laid
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  - out here, declare them unlawful,
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  - and ultimately
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  - vacate them.
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  - So huge huge,
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  - news that just broke this week.
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  - No doubt we'll see this play out at
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  - long, arduous process over the coming months. And
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  - I guess just in terms of where we
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  - currently stand in these Medicaid work requirements,
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  - Georgia
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  - and Nebraska are the only two states that
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  - have actively enforced the Medicaid work requirements under
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  - that recent federal legislation. Legislation. When we looked
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  - ahead to July 1, just in a couple
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  - days, Montana
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  - and Arkansas are gonna kick off their Medicaid
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  - work requirements and many other states, in the
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  - lead up to,
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  - to fully implement these these mandates by 01/01/2027.
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  - So big, big news there that just broke
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  - this week,
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  - but, certainly, we'll see something play out over
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  - the coming months here as well.
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  - No. Fantastic. And it really does break down
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  - a lot on party lines.
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  - Very complicated
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  - because there's an old concept that people should
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  - try and work at least to get
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  - welfare, other benefits.
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  - At the same time, that's become directional and
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  - platitude at all versus really administratable,
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  - it seems like. And so you do have
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  - all this political theater that goes on with
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  - this.
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  - How will some of this play out? What
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  - what do people expect, or is there any
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  - sense of that?
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  - I think very, very early to know how
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  - this will exactly play out in the core.
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  - I know certainly, there were talk,
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  - for some of those democratic led led states
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  - over the last couple of months to certainly
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  - challenge
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  - this rule, which they know they'll have just
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  - done.
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  - Whether that how that actually ultimately plays out
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  - over the current month remains to be seen.
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  - But
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  - no doubt we're still gonna see states roll
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  - on and continue to kick off these Medicaid
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  - work requirements,
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  - while that federal legislation is still in place.
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  - Certainly, a lot of people political theater and
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  - whatnot, like you said, got playing out over
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  - the coming months, especially,
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  - as we gear up to those midterms, later
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  - on this year as well.
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  - It's fascinating. And so that's one thing. All
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  - these states suing about the Medicaid work requirements
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  - and, you know,
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  - fascinating on both sides of the table.
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  - No comment.
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  - Tell us what else you're watching currently that's
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  - that's sort of, front and center.
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  - Yeah. I think, one that was upon a
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  - number of really interesting transactions,
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  - over the last four months. I think, I
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  - had the pleasure of speaking with, Banner Health
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  - president and CEO,
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  - Amy Perry, who is a regular attendee in
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  - our Becker CEO leadership calls every month.
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  - Banner fantastic system operating in multiple states, which
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  - is an interesting deal in terms of where
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  - it's,
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  - planning to offload and sell one of its
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  - critical access possible hospitals
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  - in California.
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  - I think it's an interesting deal despite banner
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  - selling a deal in California, but also who's
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  - buying that on the other end of the
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  - spectrum. So Coram Health,
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  - again, a for profit system that was spun
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  - out of community health systems many years ago,
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  - has restructured, has gone through bankruptcy.
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  - Now it appears to be on back in
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  - growth mode and acquire,
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  - rural hospitals, critical access hospitals,
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  - in multiple states across the country.
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  - So Quorum, at the moment, operates 11 hospitals
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  - across nine states including one in California. This
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  - this would obviously double its hospital cost
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  - this would obviously double its hospital footprint in
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  - California
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  - to two. But I think the other
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  - interesting
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  - aspect of Quorum Health,
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  - we had the opportunity to speak to their
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  - CEO, Chris Harrison, formerly their CFO, now their
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  - CEO.
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  - Really interesting deal that they're doing. Obviously, a
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  - for profit system,
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  - but they are working to convert
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  - to a nonprofit
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  - health system,
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  - which which their CEO really thinks would help
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  - position Cornell for long term sustainability,
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  - especially as as rural hospitals face mounting financial,
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  - mounting operational challenges.
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  - To have seen one system follow a similar
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  - footprint in terms of eHealth in Florida.
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  - I believe last two years ago, successfully transitioned
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  - to a nonprofit private health system. Quorum Health
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  - really, looking to acquire this hospital from Banner
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  - in California
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  - and they essentially grow its rural, footprint across
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  - the country. And then the last last thing
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  - at Coram Health as well here, they're also
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  - looking to stand up a
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  - rural hospital
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  - focused management services organization,
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  - It focuses primarily on the revenue cycle management.
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  - So we often hear about so much about
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  - revenue cycle management. Big, big challenge across the
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  - board, especially for our folks with limited resources
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  - and, you know, hospital for safety and hospitals
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  - looking for a partner in this space,
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  - especially, in line with the rural health transformation
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  - fund. There's a lot of money on the
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  - table there. Coram helps you the big potential
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  - to help the rural, hospitals who are struggling
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  - in this regard and also,
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  - stand up an MSL in there. So a
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  - lot to unpack in that deal from Banner
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  - selling that hospital. Well, interesting to see on
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  - who's on the other side of that table
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  - of buying the hospital and what might potentially
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  - happen down the line with Quorum's
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  - potential transition from a for profit system to
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  - a nonprofit system as well.
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  - Fascinating to watch. The history of Quorum is
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  - just fascinating between community health systems back in
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  - the day to where they're at today to
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  - potentially becoming a not for profit here. The
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  - whole thing is literally fascinating. The the evolution
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  - and change and so forth, literally fascinating.
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  - So, Alan, two big stories there. Quorum, Banner,
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  - and then also 25 states suing the federal
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  - government over Medicaid work requirements and eligibility requirements
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  - and administrative issues. Fascinating to watch. Alan, anything
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  - else that's top of mind you wanted to
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  - point out real quickly?
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  - Yeah. I think, maybe just to kinda one
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  - quick add on is just to maybe further
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  - explain in terms of Quorum,
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  - that nonprofit potential trans transition. What they'll essentially
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  - kinda open them up to do and how
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  - it would help them,
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  - for our listeners. So I guess Quorum Health,
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  - again, 11 hospitals in The United States, a
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  - very dispersed
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  - footprint that that yields
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  - little economies of scale and really makes it
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  - difficult to partner with maybe larger operators
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  - while structured as a for profit. So this
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  - is according to CEO Chris Harrison.
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  - He believes that that nonprofit structure would change
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  - the map on their capital. So essentially, it
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  - would give Quorum health the ability to operate
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  - under a much lower cost of debt and
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  - then also to emerge from that transaction with
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  - a much healthier balance sheet, much healthier credit
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  - rating.
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  - Really interesting just to see
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  - the the the strategy behind that potential deal
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  - and how it might play out down the
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  - line. Like you said, Quorum has fascinating history.
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  - One of the CHS though that has had
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  - its financial challenges, bankruptcy, successfully emerged from it.
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  - This is the latest in, in in in
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  - a move by its by CEO, Criterion. Well,
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  - last name to watch, I'll certainly keep readers
• 10:42
  - of the date over the coming months.
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  - Well, Alan, as always, fantastic to visit with
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  - you. Thank you so much for joining us
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  - today on the Becker's Healthcare podcast.
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  - You're a remarkable, remarkable journalist and leader. Thank
• 10:54
  - you so much for joining us. My pleasure.
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  - Thanks so much, Scott.