Modern Healthcare - - REGIONAL NEWS -

NEW SMYRNA BEACH, Fla.— Health Man­age­ment As­so­ciates is on its way to forg­ing its third deal this year af­ter it was se­lected to be­gin ne­go­ti­a­tions with Bert Fish Med­i­cal Cen­ter. The pub­lic South­east Vo­lu­sia Hos­pi­tal Dis­trict chose Naples, Fla.-based HMA over Day­tona Beach-based Hal­i­fax Health. The deal comes af­ter Florida added more over­sight of pub­lic hos­pi­tal sales and leases, and also re­quired them to un­der­take self-eval­u­a­tions of whether a takeover might be in their best in­ter­est. It’s also the epi­logue of the bun­gled deal be­tween Bert Fish and Ad­ven­tist Health Sys­tem. Bert Fish’s char­i­ta­ble foun­da­tion had suc­cess­fully sued to stop that deal— ar­gu­ing that it had been inked in se­cret and the process was bi­ased in fa­vor of Ad­ven­tist—which prompted the mea­sure for more open­ness on hos­pi­tal takeovers. In a pro­posal sub­mit­ted in March, HMA said it would pay $52.6 mil­lion to as­sume the lease and sup­ply in­ven­tory for 112bed Bert Fish. The pub­licly traded hos­pi­tal com­pany also pro­posed spend­ing at least $15 mil­lion on cap­i­tal im­prove­ments over the first five years, and $40 mil­lion over 10 years. HMA es­ti­mated that Bert Fish’s con­ver­sion from a tax-ex­empt to tax­pay­ing en­tity would pro­vide $15 mil­lion in new tax rev­enue to the com­mu­nity. The

chain pro­posed op­er­at­ing the hos­pi­tal un­der an 80/20 joint ven­ture struc­ture with the hos­pi­tal dis­trict. HMA has a large pres­ence in Florida, with 21 hos­pi­tals in the state, as well as a statewide clin­i­cal af­fil­i­a­tion with the Univer­sity of Florida’s Shands Hos­pi­tal. The hos­pi­tal com­pany’s bat­tle with hedge fund Glen­view Cap­i­tal Man­age­ment, which last week nom­i­nated a new slate of di­rec­tors to re­place HMA’s cur­rent board, has not knocked it off the ac­qui­si­tion trail. An­a­lysts have viewed its re­cent deal mak­ing suc­cess as a vote of con­fi­dence. — Beth Kutscher

HOT SPRINGS, Ark.— Capella Health­care aban­doned its bid to buy Mercy Hos­pi­tal Hot Springs from Ch­ester­field, Mo.-based Mercy. Capella, an in­vestor-owned hos­pi­tal chain based in Franklin, Tenn., reached a de­fin­i­tive agree­ment with Mercy last Septem­ber to buy the 282-bed hos­pi­tal and Mercy Clinic. Capella owns a com­pet­ing hos­pi­tal in Hot Springs, 188bed National Park Med­i­cal Cen­ter, and the com­pany noted at the time that com­plet­ing the deal would de­pend on clear­ance from fed­eral an­titrust au­thor­i­ties, as well as the Vat­i­can. Mercy and Capella ex­tended the pur­chase agree­ment once but said on June 27 that they would spike the deal be­cause of the un­cer­tainty in­volved in get­ting those nods. The or­ga­ni­za­tions said the trans­ac­tion was in­tended to yield a “stronger, more uni­fied health­care sys­tem” that could com­pete with larger providers a short dis­tance away in Lit­tle Rock, Ark.

AUSTIN, Texas— Se­ton Health Al­liance has en­tered an ac­count­able care con­tract with Unit­edHealth­care that the or­ga­ni­za­tions said could ex­tend the reach of the Se­ton ACO to as many as 320,000 Tex­ans cov­ered by the in­surer’s em­ploy­er­spon­sored plans. Se­ton Health Al­liance is a part­ner­ship of Se­ton Health­care Fam­ily (an Austin-based di­vi­sion of As­cen­sion Health) and other providers in Cen­tral Texas, in­clud­ing the mul­ti­spe­cialty physi­cian group Austin Re­gional Clinic. It is among 32 ACOs par­tic­i­pat­ing in Medi­care’s Pi­o­neer model, which is ad­min­is­tered by the CMS In­no­va­tion Cen­ter and be­gan in Jan­uary 2012. The re­la­tion­ship with Unit­edHealth­care, ef­fec­tive Aug. 1, is its first with a pri­vate payer. The al­liance mem­bers will be el­i­gi­ble for in­cen­tive pay­ments if they im­prove their per­for­mance on mea­sures such as read­mis­sion rates, dis­ease man­age­ment and preven­tion. Unit­edHealth­care and other large in­sur­ers, in­clud­ing Cigna Corp., Aetna and many of the Blues plans, are rapidly forg­ing agree­ments with providers with pay­ment mod­els that tie re­im­burse­ment to qual­ity and cost bench­marks. Unit­edHealth­care says the com­pany now ties $20 bil­lion a year in physi­cian and hos­pi­tal pay­ments to per­for­mance­based pro­grams.

Bert Fish Med­i­cal Cen­ter, above, would be HMA’s third deal of the year.

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