CHI buys in to col­lec­tions

Sys­tem takes mi­nor­ity stake in Tenet’s billing unit

Modern Healthcare - - THE WEEK IN HEALTHCARE - Ashok Sel­vam

The al­le­ga­tions fac­ing billing and col­lec­tion com­pany Ac­cre­tive Health were among the fac­tors in­flu­enc­ing Catholic Health Ini­tia­tives’ decision to ac­quire a mi­nor­ity stake in Tenet Health­care Corp.’s Conifer Health So­lu­tions, ex­ec­u­tives said.

Un­der the 10-year deal, which was an­nounced last week, Conifer will as­sume re­spon­si­bil­i­ties for rev­enue-cy­cle ser­vices at 56 CHI hos­pi­tals. Conifer Pres­i­dent Steven Mooney said some CHI of­fi­cials, in the af­ter­math of the Ac­cre­tive sit­u­a­tion, asked a con­sul­tant to take a closer look at Conifer’s op­er­a­tions. Mooney said Conifer upon re­view “came through with fly­ing colors.”

“We were built dif­fer­ently, we were born from in­side a health­care provider and we un­der­stand how im­por­tant the pa­tient is,” Mooney said, com­par­ing Conifer with Ac­cre­tive. “The pa­tient is the most im­por­tant as­set.”

The par­ties be­gan talks about two years ago, with ne­go­ti­a­tions heat­ing up in the past nine months. Conifer and CHI re­mained silent on the fi­nan­cial de­tails of the deal, in­clud­ing the size of CHI’S stake in the Frisco, Texas-based sub­sidiary of for-profit Tenet. The ad­di­tion of CHI hos­pi­tals means Conifer will pro­vide rev­enue-cy­cle ser­vices to about 150 hos­pi­tals. Tenet cre­ated Conifer in 2008, and the deal with En­gle­wood, Colo.-based CHI boosts their an­nual pa­tient rev­enue by about 55%, go­ing from $11 bil­lion to $18 bil­lion.

Out­sourc­ing rev­enue-cy­cle ser­vices is new for re­source-laden sys­tems the size of CHI, said Sh­eryl Skol­nick, an an­a­lyst with CRT Cap­i­tal Group. CHI pre­vi­ously han­dled rev­enue cy­cle in­ter­nally. The deal could rep­re­sent a change in this phi­los­o­phy as other larger sys­tems might fol­low CHI and out­source rev­enue-cy­cle op­er­a­tions. “I think they’re right that there are many things that hos­pi­tals do well,” Skol­nick said. “Col­lect­ing rev­enue is not one of the things they par­tic­u­larly do well.”

Mooney’s hope is the deal will drum up busi­ness, and he said Conifer had sim­i­lar deals in the works. But un­like the CHI trans­ac­tion, none of them in­volves of­fer­ing a stake in Conifer. Hav­ing CHI on­board could also un­lock the faith­based, not-for-profit mar­ket for Conifer.

Prior to the deal, Conifer pro­vided rev­enue- cy­cle ser­vices to 100 hos­pi­tals, in­clud­ing the 51 hos­pi­tals op­er­ated by Tenet. Faith-based, not­for-profit fa­cil­i­ties made up the ma­jor­ity of the re­main­ing hos­pi­tals, Conifer of­fi­cials said. That in­cludes the eight hos­pi­tals of the Sis­ters of Char­ity of Leav­en­worth Health Sys­tem based in Lenexa, Kan.

When as­sess­ing the com­pany’s in­ter­nal han­dling of rev­enue cy­cle, CHI of­fi­cials felt other mat­ters, in­clud­ing health­care re­form, de­served closer at­ten­tion. Be­sides free­ing up re­sources—some em­ploy­ees in­volved in rev­enue cy­cle han­dle mul­ti­ple re­spon­si­bil­i­ties—it was also a mat­ter of im­prov­ing qual­ity. CHI de­cided it needed Conifer to reach best-in-class sta­tus, said Dean Swin­dle, CHI’S ex­ec­u­tive vice pres­i­dent of busi­ness ser­vices and chief fi­nan­cial of­fi­cer, not­ing Conifer’s suc­cess with pa­tient sat­is­fac­tion and their over­all busi­ness model. While CHI is dol­ing out re­spon­si­bil­ity to Conifer, it will re­tain con­trol of the rev­enue-cy­cle ser­vices.

Conifer’s new board will con­sist of Mooney and two mem­bers each from CHI and Tenet. When asked about the size of CHI’S stake in Conifer, Swin­dle would say only that “own­er­ship is enough to mat­ter. It def­i­nitely will keep us fo­cused work­ing with them.”

The tran­si­tion is ex­pected to take less than two years. Cur­rently, CHI em­ploys 2,500 rev­enue-cy­cle em­ploy­ees. About 150 hold lead­er­ship po­si­tions and will be­come Conifer em­ploy­ees on July 1. The other CHI em­ploy­ees will join Conifer on Jan. 1, Mooney said.

Mooney said he is keenly aware of the tim­ing of the an­nounce­ment, com­ing on the heels of the Min­nesota at­tor­ney gen­eral’s crit­i­cal re­port about Chicago-based Ac­cre­tive (April 30, p. 6). He said what dif­fer­en­ti­ates Conifer from Ac­cre­tive is its health­care provider roots, com­ing from Dal­las-based Tenet. Ac­cre­tive is more fo­cused on turn­ing a profit, while Conifer takes a more pa­tient-cen­tered ap­proach, Mooney said.

Last week, Ac­cre­tive said it would con­vene a panel of ex­perts to set na­tional stan­dards for pa­tient col­lec­tions. The com­pany named for­mer HHS Sec­re­tary Mike Leav­itt to chair the panel and said other mem­bers would in­clude for­mer CMS Ad­min­is­tra­tor Mark Mcclel­lan, for­mer HHS Sec­re­tary Donna Sha­lala and for­mer Sens. Tom Daschle and Bill Frist.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.