Tennessee AG urges look at health system

Tennessee Attorney General Jonathan Skrmetti has called for the state to look into operations at Ballad Health after residents in upper East Tennessee voiced concerns about the quality and access to care provided by the system, the Tennessee Lookout reported Nov. 6

The offices of the state attorney general and department of health oversee a certificate of public advantage agreement that allows Johnson City, Tenn.-based Ballad to operate hospitals in northeastern Tennessee without the fear of competition in exchange for the health system meeting various charitable obligations and quality of care requirements. 

Over a four-year period, Ballad was about $148 million short of the annual charity care obligation it made to Tennessee while suing thousands of patients to collect medical bills, according to KFF Health News. This shortfall ostensibly occurred during years when Ballad had reported overall profits, including a net income of more than $143 million in 2022 and $63 million in 2021 while it landed $175 million in pandemic relief funds.

The 20-hospital system also failed to meet around 80 percent of the benchmarks designed to monitor and improve its care quality, including rates of infection and death, in the most recent year for which data is available, according to the report. 

CMS cited some of these problems in July after issuing one-star ratings to three Ballad hospitals, including a flagship, Johnson City Medical Center.

"There's a reason Ballad’s there," Mr. Skrmetti told the Tennessee Lookout. "There was an effort to make things work and provide better healthcare, and we need to be constantly looking at the arrangement to make sure that it's providing better healthcare."

The Federal Trade Commission has highlighted the pitfalls of COPA programs, which aim to shield hospital mergers from antitrust laws in favor of state oversight. Several hospital mergers subject to COPAs have resulted in higher prices and reduced quality of care, despite regulatory commitments designed to reduce these anticompetitive effects, according to the FTC. 

Ballad, a 20-hospital system, launched in February 2018 after Johnson City-based Mountain States Health Alliance and Kingsport, Tenn.-based Wellmont Health System merged. 

"The State of Tennessee and the attorney general actively and thoroughly supervise the COPA and have concluded each and every year that Ballad Health is in compliance with state law and that it constitutes a public advantage," a spokesperson for the system told Becker's. "As part of the state's active supervision, prior changes have been agreed to with regard to the COPA, and as it has with each change, Ballad Health agrees with the attorney general that ongoing assessment and adjustment of the terms of the COPA are both healthy and welcome."

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