Week in review: 10 biggest healthcare stories this week

Stay in the know with Becker's Hospital Review's weekly roundup of the nation's biggest healthcare news. Here's what you need to know this week.

1. 2.5k hospitals penalized by CMS for high readmissions
In the fourth year of the Hospital Readmissions Reduction Program, 2,592 hospitals face penalties to their Medicare reimbursements for a high number of 30-day readmissions. The maximum penalty this year is a 3 percent reduction in Medicare payments, which 38 hospitals face. The average penalty this year is 0.61 percent, according to Kaiser Health News.

2. 38 CHS hospitals spin off as new company
Franklin, Tenn.-based Community Health Systems announced plans Monday to spin off 38 hospitals across 16 states and Quorum Health Resources into a separate company, a move intended to strengthen the CHS' focus on larger markets. Creation of the new company, called Quorum Health Corp., is expected to be complete in the first quarter of 2016. It will be headquartered in middle Tennessee and operate independently of CHS with its own board and management team.

3. CMS' final IPPS rule for 2016
CMS issued its inpatient prospective payments systems final rule for fiscal year 2016, which calls for an increase in Medicare reimbursements to some hospitals in the next fiscal year. The 2,149-page rule also includes rates for long-term care hospitals. Overall, the rule will apply to about 3,400 acute care hospitals and 435 long-term care hospitals.  

4. IBM's $1B Merge Healthcare acquisition plan could allow Watson to 'see'
IBM announced plans to acquire Merge Healthcare, a medical imaging management platform, for $1 billion. Under the terms of the transaction, Merge shareholders will receive $7.13 per share in cash for a total of $1 billion. The Merge transaction will be IBM's third largest healthcare-related acquisition, following the Phytel and Explorys acquisitions. The transaction is still subject to regulatory review and Merge shareholder approval. Pending approval, the deal is expected to close later this year. 

5. 10 things to know about the SEC's new CEO pay-ratio rule
The Securities and Exchange Commission adopted a final rule that requires publicly traded companies to disclose the ratio of compensation of its CEO to the median compensation of its employees. The new rule is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and aims to enhance transparency and make it easier for investors to determine if executives are appropriately compensated. The rule does not limit how much a CEO is paid, however.

6. Tenet Q2 profits take $61 million hit, but per-share earnings top estimates
Dallas-based Tenet Healthcare reported a net loss of $61 million, or 61 cents a share, for the second quarter after it was docked $136 million in after-tax impairments, restructuring charges, acquisition-related costs and litigation and investigation costs. The loss has widened compared to the Q2 net loss in 2014 of $26 million, or 27 cents per share. In the last six months, the company's net operating loss totaled $14 million. 

7. HCA beats Q2 expectations in profits, revenue, admissions
Nashville, Tenn.-based Hospital Corporation of America profits surpassed expectations in the second quarter, reaching $507 million, or $1.18 per share, up 5 percent from the same period a year earlier. HCA, the nation's largest for-profit hospital operator, also surpassed expected revenue, reporting a 7.2 percent increase year-over-year to $9.90 billion. Analysts forecasted $9.82 billion, according to Reuters.

8. NYC Legionnaires' update: 8 dead, nearly 100 sick 
The death toll linked to the Legionnaires' disease outbreak in New York City rose to eight as of Aug. 6, according to a local NBC News report. A total of 97 cases have been linked to the outbreak, 16 more than were reported earlier this week. According to the Department of Health and Mental Hygiene, all of those who died were older adults who had additional medical problems.

9. OIG: Providers banned from Medicaid still received $7.4M in payments
Almost 300 providers terminated from Medicaid programs for fraud, misuse, or abuse in 2011 continued to participate in other states' programs, receiving millions of dollars in reimbursements, according to a recent report from the HHS Office of the Inspector General. Of the 295 providers who continued to participate in Medicaid despite termination, 94 received payments that totaled $7.4 million.

10. Judy Faulkner named to Forbes' 'Richest People in Tech' list
Forbes has released the first iteration of its "100 Richest People in Tech" list from billionaires across the globe, and Judy Faulkner, founder and CEO of Epic Systems, was listed as No. 80. Ms. Faulkner has a net worth of $2.6 billion. She is the only person on the list whose origin of wealth lies in healthcare. Bill Gates took the top spot, with a net worth of $79.6 billion.

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