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REN­TON, Wash.—

Prov­i­dence Health & Ser­vices will com­bine its western Washington op­er­a­tions with Swedish Health Ser­vices, Seat­tle. Un­der an af­fil­i­a­tion agree­ment ex­e­cuted Jan. 26, the names for the two groups will re­main the same, and Prov­i­dence will re­main Catholic while Swedish will re­main sec­u­lar. Prov­i­dence elab­o­rated on some of the de­tails in a fil­ing to bond­hold­ers. Swedish—in­clud­ing 624-bed Swedish Med­i­cal Cen­ter and 198-bed Cherry Hill Cam­pus, both in Seat­tle, and 156-bed Swedish/ed­monds (Wash.)—will form a new not-for-profit called Western Health­con­nect, and Prov­i­dence will trans­fer its western Washington op­er­a­tions to a new di­vi­sion, ac­cord­ing to the fil­ing. To­gether they will “be­come a new not-for­profit health sys­tem serv­ing the res­i­dents of Western Washington.” The agree­ment calls for Western Health­con­nect to be­come part of the Prov­i­dence ob­li­gated group for fu­ture bor­row­ing but stip­u­lates that Prov­i­dence as­sumes no li­a­bil­ity for ex­ist­ing Swedish debt. The deal in­volves no ex­change of money, merger of le­gal en­ti­ties or trans­fer of as­sets, though Prov­i­dence “has agreed to a sig­nif­i­cant cap­i­tal com­mit­ment over 10 years on projects of Western Health­con­nect or Swedish.” The sys­tems an­nounced that Prov­i­dence ex­ec­u­tive Arnold Schaf­fer will serve as ex­ec­u­tive vice pres­i­dent and chief ex­ec­u­tive of the new Prov­i­dence di­vi­sion and over­see in­te­gra­tion of the or­ga­ni­za­tions; he pre­vi­ously led Prov­i­dence’s re­gional op­er­a­tions in Alaska, Washington, Cal­i­for­nia and Mon­tana. Swedish Pres­i­dent and CEO Dr. Rod Hochman will be one of two group pres­i­dents for Prov­i­dence’s five-state sys­tem. Kevin Brown, who was chief strat­egy of­fi­cer for Swedish, will serve as chief ex­ec­u­tive for Swedish Health Ser­vices. Prov­i­dence Chief Op­er­at­ing Of­fi­cer Mike But­ler was pro­moted to group pres­i­dent for Prov­i­dence Health & Ser­vices. AURORA, Colo.—

The Univer­sity of Colorado Hospi­tal and the two-hospi­tal Poudre Val­ley Health Sys­tem will op­er­ate as Univer­sity of Colorado Health un­der a joint op­er­at­ing agree­ment. The agree­ment, first an­nounced in June, cre­ated a new gov­ern­ing board for the three hos­pi­tals with au­thor­ity to bor­row for cap­i­tal in­vest­ments and over­see op­er­a­tions, with some ex­cep­tions that will re­quire ap­proval from hospi­tal gov­ern­ing boards, said Bruce Schrof­fel, pres­i­dent and chair­man of Univer­sity of Colorado Health. Schrof­fel was for­merly pres­i­dent and CEO of Univer­sity of Colorado Hospi­tal. Ru­lon Stacey, pres­i­dent and CEO of Poudre Val­ley Health Sys­tem, was named CEO of the joint health sys­tem. The 11-mem­ber board will in­clude Stacey, Schrof­fel, four mem­bers from Poudre Val­ley Health Sys­tem, three mem­bers from the Univer­sity of Colorado Hospi­tal and two mem­bers from the Univer­sity of Colorado, Schrof­fel said. The new or­ga­ni­za­tion will in­clude Univer­sity of Colorado Hospi­tal, a 437-bed hospi­tal in Aurora; the two-cam­pus 238-bed Poudre Val­ley Hospi­tal, Fort Collins, Colo.; and 136bed Med­i­cal Cen­ter of the Rock­ies, Love­land, Colo. The or­ga­ni­za­tions are in talks to lease 548-bed Me­mo­rial Health Sys­tem, Colorado Springs, Colo. LOS AN­GE­LES—

A fed­eral judge blocked the state of Cal­i­for­nia from cut­ting Med­i­caid pay­ments by 10% for physi­cians, clin­ics, phar­ma­cists, den­tists, am­bu­lance providers and durable med­i­cal equip­ment sup­pli­ers. Trade as­so­ci­a­tions rep­re­sent­ing the providers sued the Cal­i­for­nia Depart­ment of Health Care Ser­vices and HHS ar­gu­ing that the cuts vi­o­lated fed­eral law re­quir­ing that Med­i­caid pro­grams en­sure ac­cess to ser­vices, and that fed­eral of­fi­cials failed to ap­pro­pri­ately con­sider the im­pact of the cuts in ap­prov­ing them. U.S. Dis­trict Judge Christina Sny­der wrote in a 25-page rul­ing that the groups that brought the law­suit have a strong like­li­hood of suc­ceed­ing in the ar­gu­ment that the CMS ap­proval was “ar­bi­trary and capri­cious.” Cal­i­for­nia of­fi­cials ar­gued that providers don’t have stand­ing to sue to en­force fed­eral re­quire­ments. Sny­der ruled they do un­less the U.S. Supreme Court rules oth­er­wise in an­other Cal­i­for­nia Med­i­caid case heard by the high court in Oc­to­ber. “The state’s re­peated at­tempt to slash Medi-cal re­im­burse­ment rates is a short-sighted so­lu­tion that bal­ances the bud­get on the backs of the poor­est and most vul­ner­a­ble Cal­i­for­ni­ans,” Dr. James Hay, pres­i­dent of the Cal­i­for­nia Med­i­cal As­so­ci­a­tion, one of the plain­tiff or­ga­ni­za­tions, said in a news re­lease. Sny­der is­sued a pre­lim­i­nary in­junc­tion last month block­ing sim­i­lar cuts to hospi­tal-based skilled-nurs­ing in a sep­a­rate law­suit brought by the Cal­i­for­nia Hospi­tal As­so­ci­a­tion.

Swedish Med­i­cal Cen­ter will be part of the new not-for-profit Western Health­con­nect.

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