August 9, 2016
President and CEO, Mountain States Health Alliance
303 Med Tech Parkway, Suite 30
Johnson City, Tennessee 37604
President and CEO, Wellmont Health System
1905 American Way
Kingsport, Tennessee 37660
Dear Mr. Levine and Mr. Hove:
I have attached a set of preliminary questions that the Virginia Department of Health (“Department”), in consultation with the Office of the Attorney General, would like responses to in order to review the request for a letter authorizing a cooperative agreement. I understand that the Code of Virginia, at §15.2-5384.1.F(2), only gives the State Health Commissioner the authority to request supplemental information upon receipt of a recommendation from the Southwest Virginia Health Authority. However, in the interest of time and for providing the most expeditious review of the request I wanted to provide you with this set of questions as early as possible. Hopefully this early submission will provide you with ample time to provide a complete response. Please note that upon receipt of a recommendation from the Southwest Virginia Health Authority, and also during the 45-day period of active review by the Department, we may have additional requests for supplemental information.
Should you have questions please contact feel free to contact me by email at Erik.Bodin@VDH.Virginia.Gov or at (804) 367-2102.
Cc James M. Daniel, Jr.
Hancock, Daniel, Johnson & Nagle, PC
Richard G. Cowart
Baker, Donelson, Bearman Caldwell & Berkowitz, PC
Request for Additional Information
Request for a Cooperative Agreement
Wellmont Health System and Mountain States Health Alliance
Virginia Department of Health
Please provide all responses in PDF and Word formats. Where data or lists are requested please provide the information in PDF and Excel formats. Where necessary use Access format.
“MSHA” shall mean Mountain States Health Alliance, “WHS” shall mean Wellmont Health System and “NHS” shall mean the proposed New Health System.
“Virginia facilities” shall mean any facility location in Virginia and operated by either MSHA or WHS or a related corporation.
Two (2) year historical period shall mean FY 2013-2014 and FY 2014-2015.
Five (5) year historical period shall mean FY 2010-2011, FY 2011-2012, FY 2012-2013, FY 2013-2014, FY 2014-2015.
The YTD shall mean 12 month of actual unaudited activity for FY 2015-2016.
The five (5) year forecast period shall mean FY 2016-2017, FY 2017-2018, FY 2018-2019, FY 2019-2020, FY 2020-2021.
Contact information shall include: name, title, address, email address and telephone number.
Application shall mean: Request to the Southwest Virginia Health Authority for a letter authorizing cooperative agreement pursuant to Virginia Code § 15.2-5384.1 and the regulations promulgated thereunder at 12VAC5-221-10 et seq., submitted by Mountain States Health Alliance and Wellmont Health System dated February 16, 2016.
Appendices shall mean: 3,791 page document labeled Application for a Letter Authorizing Cooperative Agreement – Exhibits.
Standard exhibits for two (2) year historical period, YTD, and five (5) year forecast list: 1) Service, 2) Utilization, 3) FTE, 4) Revenues and Expenses.
III. Financial (in detail for each facility)
- Please describe how any bond covenants presently encumber any Virginia facility.
- Please describe discussions (e.g., meetings, conversations) you have had with any bond agency or rating official concerning this merger or Application.
- Please provide the names, positions and contact information of any bond agency or rating official that has been communicated with concerning this merger or Application.
- Provide unaudited versions of all schedules presented in the audited financial statements at MSHA and WHS for the year end June 30, 2016.
IV. Academic and Research Opportunities
A. Graduate Medical Education
- Please provide all reports issued by the ACGME or individual residency review committees for each residency and fellowship program at any NHS facility in the past seven (7) years.
- Please provide all schedules from the Medicare costs reports for the two (2) historical years detailing graduate medical education activity at any NHS facility. Transcribe these schedules into an Excel file.
- Please list all residency and fellowship programs, identifying the sponsoring institutions and individuals responsible for each residency and fellowship program. Provide contact information for all responsible individuals.
- Please provide an organization chart for the GME programs currently in place. List the individuals, with their titles responsible for each component displayed on the organization chart. Provide the contact information for these individuals.
- Please provide copies of affiliation agreements that exist related to the graduate medical education programs (residency and fellowship).
- Provide a chart for all facilities showing the resident and fellow FTE positions by program and by location for the two (2) year historical period and the current year. Provide a five (5) year forecast of FTE’s by program and by location. The historical numbers should tie to the Medicare Cost Report data requested above.
- Please provide detail of all present and planned relationships and affiliations of the GME programs with Virginia institutions of higher education. Please provide the names, positions and contact information for the Virginia institutions concerning NHS GME programs.
- Edward Via College of Osteopathic Medicine is located at Virginia Tech. Although this college is located outside the intended service area, are there any plans to develop academic or research programs at this or any Virginia institution of higher learning?
- Provide the resumes of the individuals responsible for research at MSHA and WHS. Provide the organizational charts of each existing research program. Indicate in detail how the research programs will be consolidated.
- Provide the revenues and expenses for the two (2) year historical period, YTD, and the five (5) year forecast period for the core research budget. Detail how the core research budget will be financed.
- Describe by facility any charitable endowment available for medical research. List the amount of the endowment, the type of medical research supported and the year the endowment was received.
- Please provide a listing by facility of any research protocol presently in force at any NHS facility. List the principal investigator of the protocol (and provide contact information). List the NHS investigator (and provide contact information). List the research sponsor (and provide contact information). List the amount of financing from the sponsor and the duration of the research.
- Please provide all minutes of all committees which have evaluated informed consent and patient protection for the two (2) year historical period and YTD. Please describe in detail all collaborative effort in research with institutions location in Virginia.
- Please describe the future of the research program at each Virginia facility in the NHS.
C. Tertiary Program
- Please detail the utilization by DRG of Virginia patients from the Virginia geographic service area at each of the three (3) NHS tertiary hospitals in Tennessee and at other Virginia tertiary competitors including Carilion, Inova, UVA, VCU Medical Center and Sentara.
- Please calculate the market share of tertiary service in the Virginia geographic market defined in the Application that is held by each NHS tertiary provider and each Virginia competitor.
- Access the strengths and weaknesses in the NHS tertiary program compared to Carilion, Inova, UVA, MCV and Sentara. Be specific for each specialty and sub-specialty program.
- Detail how NHS tertiary programs will be consolidated and improved. Be specific.
- How do you plan to ensure access within customary drive times to various health care services after five years if certain facilities are closed or services are eliminated? Are there plans, nascent or otherwise, to close any facility? Specifically, under the merger, there would be two hospitals located in Norton, Virginia. Are there any plans to cease operations of one of them?
- Should the Lee County Hospital Authority fail to complete their project to reopen the former Lee Regional Medical Center as a critical access hospital, how do you plan to meet the health care needs of the people in Pennington Gap and the surrounding area?
- Why are there no plans for locating tertiary care services in a Virginia hospital or other facility within the merged system?
- Please provide a listing by DRG of the number of Virginia Medicaid patients admitted to each of the three tertiary hospitals for the two (2) year historical period and YTD.
- Please provide a listing of all physicians and physician groups that provide tertiary specialty services at the three tertiary hospitals. Please provide contact information for each practice. For each practice, list all physicians by specialty, practice and indicate which have accepted Virginia Medicaid patients during the two (2) year historical period and for YTD.
V. Medical Staff
- Please provide copies of the existing medical staff by-laws for each Virginia facility of the NHS.
- For the Virginia facilities please provide a listing of medical staff members (name, credentials, age, UPIN, date of first appointment and specialty certifications held).
- Please provide any report, memo or analysis of medical staff shortages developed in the five (5) historical years by WHS and MSHA.
- Please provide a listing of employed medical staff FTE’s for each Virginia facility for the two (2) year historical period, YTD and the five (5) year forecast period.
- Provide documents relating to how past physician acquisitions and physician contractual agreements or affiliations have contributed to the NHS’s ability to enter into risk based and/or value based contracts.
VI. Exclusive Contracts
- Please provide a list of any exclusive contracts, by facility, for the provision of medical or healthcare services at each Virginia facility.
- Please provide a copy of all such exclusive contracts.
- Provide a list of all Virginia physicians with UPIN and contact information that operate under each exclusive contract. List the Virginia facilities where the physicians practice.
- You state that the proposed system would be “locally governed.” What is meant by “local”? How do you plan to ensure that local health concerns of local communities continue to be addressed after the merger and that local governance is maintained?
- Please list all current board members of MSHA, WHS and NHS and board or advisory board members for each individual facility in Virginia. Provide their address of residence, phone number, email address, business position and address and business phone number. Provide their date of actual appointment to the board. Show committee service with date of committee service.
- What is the total number of MSHA board members? How many reside in Tennessee, in Virginia and elsewhere?
- What is the total number of WHS board members? How many reside in Tennessee, in Virginia and elsewhere?
- Please provide all disclosure of conflict of interest statements that have been filed in the three (3) most recent years by any board member, executive officer or physician that operates under an exclusive contract with any health care facility.
- Please provide detail and documents on the current and proposed legal corporate organizational structure of each Virginia facility.
- The mix of the board of directors and of senior management for the new system appears to parcel out duties equally between Mountain States Health Alliance and Wellmont Health System. How will the mix of the board of directors and senior management at NHS provide for a greater presence of Virginia facilities? Provide specific details.
VIII. Banking Relationships
- Please describe all existing banking relationships by bank and by Virginia facility.
IX. Health Insurance Relationships
- Please describe all existing health insurance relationships by company and by Virginia facility.
- Detail any plan, if one exists, for vertical integration or for providing a health insurance product unique to covering services offered by the final, merged system.
X. Mental Health, Addiction Recovery And Substance Abuse
- Please describe the models of care and programs that will be available at each Virginia facility under the NHS.
- Please describe the merged leadership structure for these programs and its location.
- Please provide the number of FTE’s by position for these programs at each Virginia facility for the two (2) year historical period, YTD and for the five (5) year forecast period.
- Please provide the utilization statistics for these programs, by service type, by age at each Virginia facility for the two (2) year historic period, YTD and for the five (5) year forecast period.
- Please provide a revenue and expense forecast for each of these programs at each Virginia facility for the two (2) year historic period, YTD and for the five (5) year forecast period.
- Please provide the names and contact information for the individuals presently responsible for mental health, addiction recovery and substance abuse programs at MSHA and WHS and each of their Virginia facilities.
- Please provide the number of FTE’s in these programs by position for the aggregate of all Virginia facilities, for the aggregate of all Tennessee facilities, and for the aggregate of all NHS activity for the two (2) year historical period, YTD, and for the five (5) year forecast period. Describe key assumptions of the forecast period.
- Please provide the utilization statistics by detailed service type for all Virginia facilities, for all Tennessee facilities, and for all NHS activity for the two (2) year historical period, YTD, and for the five (5) year forecast period. Describe key assumptions of the forecast period.
- For each of these programs please provide the revenue and expense detail for all Virginia facilities, for all Tennessee facilities, and for all NHS activity for the two (2) year historical period, YTD, and for the five (5) year forecast period. Describe key assumptions of the forecast period.
- Please quantify the unmet need for each of these services in the Virginia geographic service area.
- For each WHS and MSHA Virginia facility provide a listing of each and every third party payer, total revenues and total net revenue for the two (2) year historic years, YTD, and for the five (5) year forecast period.
- For the aggregate of MSHA facilities, the aggregate of WHS facilities, NHS facilities in Virginia, NHS facilities in Tennessee and all NHS facilities provide a listing of total revenue and net revenue for each and every third party payer, for the two (2) historic years, YTD and the five (5) year forecast period. Reconcile this detailed data to the NHS Baseline Financial Model (p. 3639-3651) presented in the Appendices previously submitted.
- Provide an electronic copy (with documentation) of the NHS Baseline Financial Model. List the contact information of all individuals who developed this model.
- Provide an electronic copy (with documentation) of the NHS Baseline Financial Model showing each schedule previously presented for the aggregate of the Virginia facilities. Provide PDF and Excel versions of the schedules.
- Provide a copy of any third party payer contracts governing payments for services to any Virginia facility presently in force (or in force during the two (2) year historical period). Provide the contact information for the individual responsible for these contracts at the third party payer.
- Please provide the contact information for the individuals responsible for the third party payer negotiations at MSHA and WHS.
- Please provide a copy of the charge master utilized by MSHA and WHS in the two (2) year historical period (Excel or Access formats only). Show item charges, item total revenue, and item total net revenue for MSHA and WHS facilities for each year.
- Please provide the charge master currently in force for MSHA and WHS (in Excel or Access).
- From the charge master currently in force at MSHA and WHS create a new unified “baseline least price” charge master. This analysis should compare individual item charges at each system, and show the percent difference (Excel or Access format only).
- Please provide a copy of any consultant report, internal report or memo, finance committee or board minutes related to changes in the charge master, pricing strategy or policy, revenue maximization, or similar topics from 2009 to present.
- Please describe how the NHS will implement charge master policy.
a.) Will there be a unified charge master?
b.) How will Virginia facilities be treated?
c.) How will the charge master be different for tertiary teaching facilities and rural facilities?
- Please provide detailed utilization and revenue statistics for hospital, outpatient and physician services for each Virginia facility for Medicaid Managed Care, Tricare, Medicare Advantage and any other Governmental plans for the two (2) year historical period, YTD and the five (5) year forecast period. Provide similar aggregate statistics for the Virginia facilities.
- Please provide detailed utilization and revenue statistics for hospital, outpatient, and physician services for each tertiary hospital for Virginia Medicaid programs, Tennessee Medicaid programs, Tricare, Medicare Advantage, and any other Government plans for the two (2) year historical period, YTD, and the five (5) year forecast period.
- Please provide detailed utilization and revenue statistics for hospital, outpatient and physician services for uninsured patients at each Virginia facility for the two (2) year historical period, YTD and for the five (5) year forecast period. Provide similar aggregate statistics for the Virginia facilities.
- Please provide detailed utilization and revenue statistics for hospital, outpatient and physician services for charity care patients at each Virginia facility for the two (2) year historical period, YTD and for the five (5) year forecast period. Provide similar aggregate statistics for the Virginia facilities.
- Please describe all changes in pricing implemented by MSHA and WHS since 2009.
XII. Market Analysis
- For each Virginia facility provide a listing of inpatient discharges and inpatient patient days (and a calculation of percentage of each total) by zip code.
a.) Map the 75% and 90% service areas of each facility.
- For each Virginia facility provide total charges (inpatient, outpatient and combined) by zip code.
a.) Map the 75% and 90% service area for each statistic.
- Please provide a supplement to Section 14 of the Application. In this supplement, consider only the Virginia geographic market area that you have defined in the Application. Revise all text and tables to summarize only the Virginia geographic market area you have defined. For each table column provide absolute numbers and percentages in the columns.
- Provide appendices which list all competitors that are counted in the supplement tables. Provide the contact information for each listed competitor. Calculate pre and post-merger HHI’s for all products, services and facilities. Provide your assessment of the strengths and weaknesses for each competitor listed.
- Employ standard analysis to document any unmet and under-met need for product, services and facilities in the Virginia geographic service area. Describe in detail how you will fill that unmet / under-met need.
- Please provide any competitor analysis or SWAT analysis that MSHA or WHS (or their consultants) have conducted since 2009.
- Please provide a copy of all requests or orders from the FTC, any other federal agencies and from Tennessee antitrust agencies.
- Please provide complete copies of all submissions to the FTC or any other federal agency or to any Tennessee agency.
- Please provide copies of all strategic plans, management plans or operational plans developed for MSHA and WHS since 2009.
- Specifically, how will the merged system provide information to governmental oversight officials and programs in both states so that the model of merger allows a complete portrayal of operations so sufficient oversight is maintained and federal antitrust laws will not be the basis of a legal challenge?
XIII. The Virginia Faculties
- Provide a list of services for each Virginia facility. Indicate which of the services currently offered is a “necessary or needed service”. Provide a five (5) year forecast of additional services for each facility indicating necessary services.
- If there is any intention to remove or consolidate any services over the five (5) year forecast period at any Virginia facility, please detail and justify these intentions.
- If certain facilities are eliminated or their services are somehow truncated after five years, would the merged system be willing to consider, at that time, making a commitment that the remaining hospitals and services be maintained for a period of years?
a.) If so, please provide a detailed description of a commitment proposed by the NHS.
- Detail appropriate quality and accessibility standards for each service offered or planned for the NHS. Provide data on these indicators for the five (5) year historical period and YTD period. Provide a ten (10) year specific forecast for improvements.
- Please explain the implementation milestones and dates over the five (5) year forecast period at each Virginia facility of the following programs:
a.) The Population Health Improvement Program
b.) Expanded Mental Health, Addiction Recovery and Substance Abuse Prevention Program
c.) Academic and Research Opportunities
d.) Regional Health Information Facilities
Be specific in detailing dates and milestones.
- Provide any Joint Commission report issued for each WHS and MSHA Virginia facility since 2009.
- Provide a listing by vendor of the thirty (30) highest annual payments by each WHS and MSHA Virginia facility for the two (2) year historical period.
- Provide any report, analysis, memo or committee minutes, detailing the state of the physical plant condition at each Virginia WHS and MSHA facility, written during the last five (5) years.
a.) If renovation or other corrective action was taken to address physical plant issues identified in the provided report, analysis, memo or committee minutes please provide the contract, work order, etc, detailing the work done.
- Is there a model of services or operations that will be offered at the different NHS Virginia facilities? Describe for each Virginia facility.
- Please provide revenue and expense statistics for each NHS Virginia facility for the historical period, YTD and the five (5) year forecast period.
- Please provide detailed capital expense statistics for each NHS Virginia facility for the historical period, YTD and the five (5) year forecast period.
- Please provide detailed FTE statistics by position for each NHS Virginia facility.
- Please describe all clinical efficiencies at each Virginia facility expected to result from the merger. Detail when each will be implemented.
- You state that one result of the merger would result in savings equal to the level of spending of a new $750,000 foundation. How was this calculated?
- In the event that the merger is unwound due to unanticipated negative effects, and the plan of separation needs to be implemented, how do you plan to maintain the smooth operation of the affected hospitals and facilities within the merged system, and prevent undue disruption so that existing access to health care services continues to be maintained? Will such a plan have a Virginia-specific component?
- How will the applicants respond if only one of the states, either Tennessee or Virginia, decides to approve the cooperative agreement?
- If the merger is approved by both states, how do you plan to satisfy the need for health care if one state decides, or both states decide, later that the benefits of the merger no longer outweigh the potential disadvantages to health care and access to health care?
- To provide and promote access to health care, are there any plans for introducing mobile services and clinics to compensate for the lack of public transportation in the rural parts of the service area, especially those in Virginia?
- Legal documents contained in the exhibits to the application indicate that Tennessee law was chosen to govern and interpret the merger agreement. How does this decision not place the merged system’s Virginia hospitals and services at a disadvantage
- Are there any plans for directly providing access to needed health care services for residents of Lee County, in the wake of the closure of Lee Regional Medical Center on October 1, 2013?
- How will the merged system specifically align itself, as its application states it will, with the Virginia Plan for Well-Being developed in 2016? The Virginia Plan for Well-Being can be viewed at http://www.vdh.virginia.gov/Administration/VPfWB/.
- While the merged system will develop pediatric specialty centers in Kingsport and Bristol, Tennessee, and deploy pediatric telemedicine and rotating specialty clinics to serve rural hospitals, is there a specific behavioral health component to this program? Will Virginia’s needs be disproportionately met by the use of telemedicine?
- In the application, you state that “labor efficiencies” will accrue from the merger. At many of public fora, such as town halls, held by MSHA and WHS in the service area, substantial concerns were voiced by members of the independent systems’ workforce. How do you plan to ameliorate such concerns so that the merged system has a vibrant, well-trained and committed workforce that is satisfied with pay rates and benefits? Will efficiencies in the workforce accrue only from attrition or will there be steps taken that tend to disrupt employees’ satisfaction?
XIV. Population Health
- Please list each Virginia facility that will adopt the concept of a “medical home”?
a.) Detail the medical staff model at each Virginia facility to support this concept.
- Please detail the number of patients by county that either MSHA or WHS have managed in conjunction with their employed physicians in the two (2) year historical period and YTD for each Virginia facility. Provide a five (5) year forecast for each Virginia facility. List the number of physicians by specialty that will be recruited by the NHS to enhance the percent of population under care.
- Please describe the NHS program for women’s services. For each NHS facility list the specific services for women. List any women’s service that will not be provided at any Virginia or tertiary facility.
- You state that, over ten years, $75 million will be invested in population improvements, $140 million will be invested to expand mental health, addiction recovery, and substance abuse prevention programs, $85 million will be invested in developing research opportunities, and $150 million will be invested in developing health information systems. Are these amounts net increases? How much of these totals are allocated and expended by Virginia facilities to improve health care in Virginia alone? How does the merged system plan to demonstrate its progress in these areas and show its accountability?
- How do you plan to ensure that the resulting merged system will use savings that accrue from the merger to develop, as an exhibit to the application states, “best practice interventions aimed at the underlying causes of poor health in vulnerable populations”?
- How will the presumed improvements in the various aspects of community health be evaluated and demonstrated? Be specific.
- What are the unprofitable programs and services that the merger would allow the system’s constituent hospitals to maintain? Be specific.
XV. Regional Exchange Of Health Information and Information Systems
- Please provide any hospital long term information plans (including any consultant’s reports) that have been developed at MSHA and WHS since 2009.
- Provide documents relating to both merging parties’ plans for electronic health records systems, including documents showing the current systems each is using now, plans to convert to a single records system (including a timeline), expected benefits of the system versus using the health information exchange, and any consultant reports.
- Provide documents relating to health information exchanges (HIEs) used by each merging party, including current usage, how information is shared, fees/costs/dues paid to use the system, how many other providers (physicians, outpatient facilities, or hospitals) currently use the system, how records are shared, the extent of patient records included in the exchange, and any consultant reports.
- Provide documents relating to any plans to create the Common Clinical IT platform, including any internal analyses and consultant reports.
- Provide documents relating to any culture audits and any governance studies or audits conducted internally or externally, including the ultimate findings and any consultant reports.
- Provide documents relating to MSHA’s and WHS’ use of tele-medicine in the area, including grant money obtained to develop/deploy systems.
- For MSHA and WHS list the existing hardware (major components) and existing software licenses by IT Vendor for hospital and physician information systems. Detail which hardware and software capabilities of the system are available in each Virginia facility. Provide copies of major systems software license agreements.
- By position list the historical, YTD and five (5) year projected information system FTEs for the NHS, MSHA, WHS, the Virginia facilities, the MSHA facilities in Virginia and the WHS Virginia facilities.
- By operating budget, list the historical, YTD and five (5) year projected information for the NHS, MSHA, WHS, the Virginia facilities, the MSHA facilities in Virginia and the WHS Virginia facilities.
- By capital budget list the historical, YTD and five (5) year projected information for the NHS, MSHA, WHS, each of the Virginia facilities, the MSHA facilities in Virginia and the WHS Virginia facilities.
- Please detail the five (5) year consolidation plan for information systems transition to information systems in NHS from MSHA and WHS.
- Please provide the FTE operating and capital statistics for any regional data center located in Virginia during the historical period and YTD. Provide this data for the five (5) year forecast period.
- Explain your approach to the investment in high tech information systems jobs in Southwest Virginia.
- Provide your anticipated 5 and 10-year timeline with milestones for development and implementation for both the Common Clinical IT platform, connectivity for information exchange and quality measurement reporting. At a minimum, the timeline should include targeted objectives for each year following the formation of the New Health System, including target dates for the following activities:
a.) Behavioral health capability. If your chosen Clinical IT system does not currently include a behavioral health module, detail your plans here, including integration or interoperability of electronic behavioral health record systems from third-party vendors.
b.) Integration of systems and/or linkage of records (medical, lab, pharmacy, diagnostic, and referral/scheduling).
c.)Migration and/or archiving of pre-existing records.
d.)Training for new users (System and non-System providers).e.)Patient access to information.
f.)Capabilities for collecting, analyzing and reporting quality outcomes (clinical, cost, patient satisfaction, etc.) for providers (System and non-System).
- Provide estimates for how and when the $150 million investment in a Common Clinical IT Platform and Health Information Exchange will be allocated, including but not limited to the amount designated for the Common Clinical IT Platform, the amount designated for connectivity with non-System providers, population health management and quality reporting capabilities. If relevant, provide estimated costs to offer EHR solutions for non-System providers, and estimated expenses to support connectivity for non-System providers, along with estimates for any revenue projected to be realized from any services offerings related to these capabilities.
XV. Additional Questions
- Provide information on the structure of Virginia physician practices to calculate the appropriate physicians’ market share of the patient population. The bargaining power of a single physician is not equal to the bargaining power of a physician group. Therefore the number of physician groups and their size (i.e. number of doctors) by specialty and county is required.
- Recalculate market shares using appropriate geographic market and output measures for the Virginia geographic market.
- Provide a copy of the nonbinding April 2, 2015 Term Sheet referenced in the Master Affiliation Agreement and Plan of Integration, page 1 paragraph 6.
- Provide the following exhibits referenced in the Master Affiliation Agreement, page 56:
a.) Exhibit C-1: Interim Parent Company Articles and Interim Parent Company Bylaws.
b.) Exhibit C-3: Amended Parent Company Articles.
c.) Exhibit C-4: Amended Parent Company Bylaws.
- Identify any potential disadvantages that may result from the Cooperative Agreement in detail for each Virginia facility.
- Detail whether the New Health System intends to increase its market share in Virginia or West Virginia. If so, provide a forecast for the five (5) year historical period.
- Provide the number of current insurance contracts that represent less than 2% of patient services revenue.
- Identify any potential insurers that would represent less than 2% of patient services revenue that do not currently contract with either system.
- Detail the percent of current insurance contracts that have fixed rate increases as written. Provide the amount and timing of these currently planned fixed rate increases. You may aggregate these rates separately for MSHA and WHS if you include the mean and standard deviation of the planned fixed rates.
- Provide the negotiated rate increases for the past five years. These increases should be calculated using the same methodology proposed in the commitment to not increase negotiated rates for hospital, physician or non-hospital outpatient services.
- Detail the proposed methodology to cap negotiated rates, including whether contractual out-of-pocket payments will be included.
- Detail how the NHS will handle price setting for uninsured or private pay patients.
- Provide the total amount detailed in the reports from MSHA and WHS, referenced in the Master Affiliation Agreement Section 10.04(d), setting forth all expenses incurred by the parties. Include justification for the above amount. Detail all additional merger-related expenses, including capital costs and management costs. Provide documentation of the availability of the necessary funds.
- Provide additional detail on the activities to be funded by the following proposed community reinvestment: 1) the $75 million investment in population health improvements; 2) the $140 million to expand mental health, addiction recovery, substance abuse prevention programs; and 3) the $85 million to develop and grow academic and research opportunities. How much of these totals are allocated to improve health care in Virginia alone? How does the merged system plan to demonstrate its progress in these areas and show its accountability?
- Provide an updated amount of net expenditures on community health improvement, health professions education, and research as detailed on your most recent IRS Form 990 Schedule H.
- Detail whether a $75 million investment in population health over ten years represents an increase in spending over that of past community health investment, and if so, provide an estimate of the aggregate planned population health investment.
- Detail whether an $85 million investment in research and training over ten years represents an increase in spending over that of past research and training investment, and if so, provide an estimate of the aggregate planned research and teaching investment.
- Compare and contrast the type of programs currently funded by Community Benefit spending, particularly in the categories above, with the planned investment over the next ten years.
- Provide the audited financial statement on MSHA as of June 30, 2015. (See Exhibits 11.4-F)
- On April 06, 2015, Fitch Ratings placed on Rating Watch Evolving the ‘BBB+’ rating for Health and Educational Facilities Board of Johnson City, TN, revenue bonds issued on behalf of MSHA and parity debt issued on behalf of MSHA listed in April 06, 2015 press release. Provide the current status regarding Fitch’s Rating Watch.
- Provide the report prepared by FTI Consulting, Inc. that details the assumptions used in calculating the proposed economies and efficiencies of the proposed merger.
- Detail how an additional layer of governance (i.e., the parent company) benefits the organization.
- Provide an organizational chart that shows the resulting NHS.
- Provide documents showing quality metrics for Unicoi Hospital before its acquisition by Mountain States.
- Provide documents from 2009-2012 relating to plans, proposals, or bids to acquire Unicoi hospital.
- Provide all documents relating to the opposition mounted by MSHA to prevent WHS from constructing a new hospital facility and emergency room in Washington County where MSHA operates its Johnson City hospital.
- Provide documents, prepared in the ordinary course of business, relating to the merging party’s business plans, short term and long range strategies and objectives, and budget and financial projections covering the next five years as either a stand-alone or affiliated system.
- Provide documents relating to each merging party’s accountable care organization (ACO) and Shared Savings arrangement, and whether the ACO or Shared Savings arrangements are hospital-led or physician-led. Separately for each physician, Mid-level practitioner, or other health professional on whose behalf the merging party negotiates with health insurance plans or is reimbursed based on a health insurance plan’s rate schedule with the party, or with whom a party has an affiliation or contractual arrangement, list:
b.) Medical specialties;
c.) Current office practice address(es);
d.)Whether he or she has an affiliation agreement with the merging party (IPA, ACO or any other affiliation or contractual arrangements). Identify these arrangements.
e.)Date on which he or she was acquired, employed by, and/or affiliated with the merging party; and
f.)The number of patients he or she treated each year.