A Medical Device Daily

The Federal Trade Commission has issued its final opinion and order to restore the competition that was lost when Evanston Northwestern Healthcare (ENH; Evanston, Illinois) acquired its competitor, Highland Park Hospital (Highland Park, Illinois). The order sets out the specific requirements for the remedy the FTC ordered in its August 2007 liability decision.

In 2007, the FTC ruled ENH's January 2000 purchase of Highland Park was anti-competitive, but that ENH did not have to sell the unit to rectify the situation.

At the time of that ruling the FTC affirmed an October 2005 ruling by an administrative law judge that found that ENH's acquisition of Highland Park was anticompetitive and violated federal antitrust law. The FTC's remedy required ENH to establish separate, independent negotiating teams "to allow MCO's [managed care organizations] to negotiate separately again for those competing hospitals, thus re-injecting competition between them for the business of MCOs."

After reviewing ENH's proposal and comments from complaint counsel, the FTC yesterday issued an order that, among other things, requires ENH to establish separate negotiating teams for both inpatient and outpatient services at Evanston and Highland Park; requires ENH to use separate negotiations as its status quo approach to negotiations with payors unless a payor specifically elects to opt out and negotiate for all ENH hospitals jointly; and, prohibits the ENH and Highland Park negotiating teams from engaging in the negotiations when a payor elects to negotiate jointly for all ENH hospitals.

In order to ensure the effectiveness of the remedy, the order also requires ENH, at the request of a payor, to submit disputes as to prices and/or terms obtained by a payor as a result of the separate negotiations, first, to mediation and, if that is not successful, to binding arbitration in accordance with the American Arbitration Association's commercial arbitration rules.

Under the order, a single, mutually agreed upon arbitrator will be selected, and the arbitrator will determine fair and reasonable prices and/or terms, assuming competition between the hospitals as it would have existed but for the anticompetitive merger.

The order also requires ENH to give prior notification to the FTC for any future acquisitions of hospitals that it may make within the Chicago metropolitan area for the next 10 years.

CMS adds new info to nursing home site

Medicaid beneficiaries and families searching for quality long-term-care services can find critical new information added to the Centers for Medicare & Medicaid Services' (CMS) web site, "Nursing Home Compare."

For the first time, information about nursing homes on the Compare web site will list whether a home is or has been on CMS' special focus facility (SFF) list. The agency's SFF initiative gives heightened scrutiny to nursing homes that have a history of poor performance or repeated violations of state and federal health and safety rules.

"[The] expansion of information on Nursing Home Compare will give beneficiaries a more complete picture of a nursing home's history of providing quality care," said CMS Acting Administrator Kerry Weems.

The SFF initiative was created, CMS said, because a number of facilities "were consistently providing poor quality of care," yet were periodically instituting enough improvement that they would pass one survey only to fail the next (for many of the same problems as before). CMS said such facilities with a "yo-yo" compliance history rarely addressed underlying systemic problems that were giving rise to repeated cycles of serious deficiencies.

In November 2007, the agency began publishing a list of Medicare- and Medicaid-participating nursing homes that have a history of serious quality-of-care problems and had failed to show significant improvement.

In February, CMS took the next step and published an updated, expanded list of nursing homes in the SFF initiative and included the category they fell within such as new additions, not improved, improving, recently graduated or no longer in the Medicare and Medicaid programs.

As of this month, there are 134 SFFs, out of about 16,000 active nursing homes. CMS works closely with states to select participants and as homes improve their quality of care and "graduate" from the program, or fail to improve and are terminated from Medicare and Medicaid, new homes are added to the list. This movement of homes off the list allows more facilities with problems to be added as the program continues.

Once a facility is selected as an SFF, the state survey agency conducts twice the number of standard surveys and will apply progressive enforcement until the nursing home either a) significantly improves and graduates from the SFF initiative, b) is granted additional time due to promising developments, or c) is terminated from Medicare and/or Medicaid.

CMS and the state can more quickly terminate a facility that is placing residents in immediate jeopardy.

Nursing homes that have the SFF designation, including information about that designation, will now be noted on Nursing Home Compare, which can be accessed at www.medicare.gov. The site helps families find nursing homes in their area.

Information about the homes includes performance scores on quality measures, staffing information and a three-year history of the home's health, safety and fire inspection reports. The site will be updated with new information quarterly, according to CMS.