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How the Department of Health will regulate Ballad Health

Zach Vance • Updated Sep 23, 2017 at 11:00 PM

“It doesn’t exist anywhere across the country.”

That’s how Ballad Health CEO Bart Hove described the incomparability of Mountain States Health Alliance and Wellmont Health System’s merger, which together control nearly two-thirds of Tri-Cities’ in-patient health services.

“Nowhere across the country has there been as significant a COPA (certificate of need) application with the amount of commitments that we're putting together and putting on the table with this application. It doesn't exist anywhere across the country,” Hove said.

The merger’s other unprecedented aspect will be the tight oversight imposed by the Tennessee Department of Health to ensure Ballad Health abides by the agreed-upon terms, as well as the $308 million in spending commitments pledged over 10 years.

So, does this mean the Department of Health has essentially entered the health-care market, since it’s accountable for Ballad Health’s cost and quality of health care moving forward?

With its passage, Executive Chairman Alan Levine referred to Ballad Health and the Department of Health as “partners” in the endeavor.

“The state has a goal here and the goal is to improve the health of this region. In that respect, we’re partners and I expect us to work very closely with the department and whoever else will work with us,” Levine said.

The state’s participation in this merger will be multifaceted, with varying degrees of supervision and surveillance.

A COPA compliance officer will work within the health system, investigating complaints related to the requirements specified in the merger’s terms of certification. While hired by Ballad Health, the officer can be terminated by Department of Health Commissioner John Dreyzehner and will report to the health system’s Audit and Compliance Committee of the Board.

Levine also said a COPA complaint hotline will be created, allowing patients and employees to make anonymous complaints.

A COPA monitor will be the investigative arm outside the health system who will continually monitor the public advantage of Ballad Health and its compliance to the terms of certification. The monitor will be an independent firm with “sufficient expertise in hospital finance, accounting, auditing, population health management and data statistics.

“There’s a COPA monitor, who at that person’s discretion, can choose to come any time they want and review what we’re doing,” Levine said.

Dreyzehner will ultimately make the final call on findings, recommendations and determining whether the public advantage still outweighs the need for competition. Additionally, the Division of Health Planning will coordinate with the COPA monitor and the commissioner to monitor Ballad Health.

Dreyzehner will also appoint an eight- to 10-member local advisory council, with members coming from a range of organizations and backgrounds, but all have to live within Ballad Health’s geographic service area.

That committee will be responsible for facilitating input from local stakeholders and patients, make recommendations on how population health initiative funds should be spent and host an annual public hearing to gather local feedback.

Ballad Health officials are also required to submit an extremely in-depth annual and quarterly report to the Department of Health.

If noncompliance is determined, the Department of Health can issue fines ranging from $10,000 to $1 million for breaching terms and commitments, with some of the most severe violations related to incremental spending commitments, employee benefits, hospital repurposing, uninsured discounts and charity care.

Levine, quite candidly, admitted tensions were high during negotiations with Department of Health representatives.

“There was a natural tension. Obviously, the state’s primary focus, once they determined there was a clear and convincing evidence standard met, was to make sure active supervision existed,” Levine said.

“There was a lot of tension in the conversations about what that means. Our view was as little (supervision) as possible. Their view was more than that. And so, there was a lot of discussion about that, and we respect the state’s position. They have an important job to do to protect the public from what could be the negative impacts of elimination of competition.”

Levine also admitted both Mountain States and Wellmont surrendered some local governance by merging under state supervision, but he believes it was better than the latter option.

“It’s true we gave up some autonomy in local governance because of the supervision components, but imagine what we would have given up if both systems were sold? We’d have no governance. That was part of the weighing that went on with the board,” Levine said.

“We’re exposing ourselves to a lot of public scrutiny here. We think it’s worth it. We understand what that means. It means certain reporters are going to write some great stories when people have complaints. But you know what? Transparency is part of trust and where we fall short and we’re being held accountable, the public will have more trust that we’re trying to do the right thing.

“I would challenge any other hospital to subject themselves to that level of transparency.”

Email Zach Vance at zvance@johnsoncitypress.com. Follow Zach Vance on Twitter at @ZachVanceJCP. Like him on Facebook at Facebook.com/ZachVanceJCP.

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