Inquirer.com – Zurich DR

Author: Harold Brubaker

  • Bonds for sale of South Jersey’s Advantage Behavioral Health failed to attract investors

    The nearly $600 million in tax-free bond issue meant to finance the sale of South Jersey’s Advantage Behavioral Health failed to attract enough investors last week, leading investment bankers to put the transaction on hold, Bond Buyer reported.

    Despite the extremely high investment yield as high as 8.25%, portfolio managers were troubled by the heavy debt load that would have been placed on a company with a short track record and few hard assets backing it up, according to the trade publication.

    Bond Buyer said that KeyBanc Capital Markets is working on restructuring the deal to salvage the sale of Advantage Behavioral by a private equity firm to a nonprofit called QCF Advantage LLC, which was created in April for the acquisition.

    Representatives of the private equity firm, Connecticut-based Clearview Capital, and QCF Advantage, whose parent company is based in Houston, did not respond to requests for comment Tuesday. Officials at Marlton-based Advantage could not be reached for comment.

    Clearview took control of Advantage in April 2025, which means a successful sale would be a quick turnover by private equity standards.

    The proposed sale was notable not just because it would have increased Advantage’s debt by 12 times, according to Bloomberg Law, but also because of the structure that would have left Clearview and current executives as owners of a for-profit entity that would manage Advantage.

    The proposed sale price was about $520 million, according preliminary bond documents. That price included $80 million being held back to see if Advantage hits profit targets after the sale. The company had $141.6 million in revenue in the 12 months that ended May 31.

    Founded in 2017 in Camden County, Advantage also operates in Pennsylvania and six additional states. It offers intensive outpatient therapy through a business called Victory Bay and telehealth services through Harmony Bay. It also operates 17 sober-living houses under its Dignity Hall brand in Blackwood, Laurel Springs, Sicklerville, and several other South Jersey towns.

  • How to get paid for providing home care services in Philadelphia while vacationing in Jamaica

    How to get paid for providing home care services in Philadelphia while vacationing in Jamaica

    A federal law passed in 2020 required state Medicaid programs to implement electronic verification systems to verify that personal-care services were actually being delivered where they were expected.

    The systems were adopted to prevent the sort of fraud unveiled this week in Philadelphia by federal and state prosecutors, who charged 18 people for allegedly billing Medicaid while they were in prison, working at one of the city’s sports stadiums, relaxing on a cruise, or vacationing in Jamaica.

    Why don’t the electronic visit verification (EVV) systems work better?

    “It’s tough to verify that the services are actually being rendered,” David Metcalf, the top federal prosecutor in Philadelphia, said Tuesday. “The caregiver or the client behind closed doors simply can tap a button on their smartphone app or call in, and that record doesn’t actually establish that the person was actually there.”

    If location services on the smartphone are turned off, the system does not register where the caregiver is, Metcalf said. When a caregiver calls to check in or out of a shift, the system does not pick up where the caregiver is but, rather, where the phone is registered, he said.

    “EVV was not sufficient to prevent people from scheming the system,” Metcalf said.

    Federal officials from the Department of Justice and the Department of Health and Human Services did not discuss how the system might be improved. But T. March Bell, inspector general for the health and human services agency, said after Tuesday’s news conference that some states have adopted stricter controls.

    The Pennsylvania Medicaid program requires caregivers to submit a location as part of visit verification, but it does not limit services to the client’s home because they sometimes happen elsewhere in the community, according to the Pennsylvania Department of Human Services.

    If the human services department suspects fraud, it refers the matter to the state attorney general’s Medicaid fraud-control section, the agency said.

    National anti-fraud efforts

    The showing of federal officials in Philadelphia on Tuesday was part of a nationwide effort by the administration of President Donald Trump to root out healthcare fraud.

    In May, the administration implemented a temporary moratorium on the enrollment of new home care and hospice companies into Medicare, the federal insurance program for people 65 and up.

    Pennsylvania followed with its own six-month moratorium on enrolling new hospice companies in Medicaid, which is jointly funded by state and federal taxes, “after reviewing the risk levels of Medicaid hospice services in Pennsylvania,” state human services officials said in an email Friday.

    Kimberly Brandt, deputy administrator and chief operating officer at the U.S. Department of Health and Human Services, on Tuesday encouraged Pennsylvania to follow through on home care and “take the action needed to protect beneficiaries and taxpayer dollars.”

    Pennsylvania said it is still determining whether a temporary moratorium on home health providers is needed.

  • Federal court approves settlements that will pay New Jersey $2.5 billion for PFAS contamination

    Federal court approves settlements that will pay New Jersey $2.5 billion for PFAS contamination

    A federal judge in Camden approved settlements with DuPont and 3M that will pay New Jersey up to $2.5 billion over the next quarter century to remediate damages from decades of manufacturing and use of PFAS chemicals in the state.

    The order Friday by Renée Marie Bumb, chief U.S. district judge for New Jersey, ends a legal battle over so-called forever chemicals that started in 2019 and resulted in agreements last year that survived objections by counties, municipalities, and others over the settlement’s structure.

    “This is truly a historic moment for New Jersey, which has experienced disproportionate and extensive pollution impacts from decades of PFAS manufacturing and use by DuPont and 3M,” Ed Potosnak, acting commissioner of the New Jersey Department of Environmental Protection, said in a news release.

    The DuPont portion of the settlement covers two South Jersey manufacturing sites: Chambers Works in Pennsville and Carney’s Point, Salem County, and Repauno Works in Greenwich Township, Gloucester County. Two additional DuPont locations covered by the settlement are in Middlesex and Passaic Counties.

    3M did not manufacture per- and polyfluoroalkyl chemicals in New Jersey, but it sold a significant share of the firefighting foam that contained PFAS. It was used in military facilities, firefighter training academies, state government, and local fire departments across the state, according to state officials.

    Neither DuPont nor 3M responded to emails requesting comment Saturday.

    The approved agreements call for annual payments over 25 years. 3M will pay a total of $400 million to $450 million and DuPont and related companies will pay a total of $875 million into funds used to restore natural resources and abate damage to drinking water systems, according to Bumb.

    The DuPont entities are responsible for additional remediation commitments worth $1.2 billion, Bumb said.

    PFAS have been manufactured in the United States since the 1940s to make household, consumer, and industrial products. The World Health Organization in 2023 classified them as likely carcinogens. Health experts have associated them with high cholesterol, developmental issues in fetuses, and other health problems.

  • Federal and state officials highlight Medicaid fraud in Philadelphia

    Federal and state officials highlight Medicaid fraud in Philadelphia

    Federal and state officials including Mehmet Oz, head of the Centers for Medicare and Medicaid Services, and Pennsylvania Attorney General David Sunday were in Philadelphia on Tuesday to highlight efforts to combat the persistent problem of Medicaid billing fraud in home care.

    During a news conference in Center City, officials outlined Pennsylvania cases involving a personal-care assistant who billed Medicaid 1,000 times for more than 24 hours of work in a single day, another who billed for helping his father in South Philadelphia while being arrested in Chester, and an agency that billed Medicaid $225,000 for services provided by an aide who was dead.

    Federal and state prosecutors used the occasion to announce charges against 18 people and one agency in mostly unrelated cases for defrauding Pennsylvania’s Medicaid program of $4 million by billing for home-care services they did not provide. The alleged fraud occurred roughly over the last five years.

    The alleged fraud in these cases filed over the last two weeks is tiny compared with the size of the program. Pennsylvania spent $8.1 billion on home-care services last year, up from $2.3 billion in 2020, when the program expanded and thousands more people started getting paid to provide home care.

    “Used properly by honest citizens, the program allows those with physical ailments to be cared for by those they trust the most,” said Colin McDonald, of the Justice Department’s National Fraud Enforcement Division. “But infiltrated by greedy and deceitful opportunists, this program becomes a money tree, a gravy train for criminal fraudsters.”

    Colin McDonald, Assistant Attorney General, Department of Justice National Fraud Enforcement Division, speaks as federal and state law enforcement officials announce healthcare fraud charges, Tuesday, August 4, 2026 in Philadelphia.Joe Lamberti / For The Inquirer

    The U.S. Department of Justice shared details on six new cases. The Pennsylvania attorney general recently filed five new cases.

    The biggest case involved $1.5 million in billings from a personal-care assistant registered with 13 agencies who more than 1,000 times charged Medicaid for more than 24 hours in a single day, Sunday said. On one occasion, the aide billed for 126 hours in a single day, Sunday said.

    Federal prosecutors charged Benevolent Home Health Care with billing 600 times in 13 months for a personal-care aide who was dead. That case originated during the arrest of the husband of one of its owners on drug-trafficking charges, said David Metcalf, U.S. attorney for the Eastern District of Pennsylvania.

    As the man was being arrested, he told agents from the Drug Enforcement Agency that he had to clock out of his shift as a home-care aide, even though he was not providing services. When asked about it, according to Metcalf, he said: “Everybody is doing this. If that’s a problem, you’d have to arrest the whole city,”

    Attorneys for Khaleelah Williams and Saleemah Davis, Benevolent’s owners, said they had no comment.

    In other cases, defendants billed for providing services while they were in prison, working at one of Philadelphia’s sports stadiums, or vacationing in Saudi Arabia, Jamaica, or Colombia

    This story has been updated to correct the name of the agency Mehmet Oz heads.

  • Quality Community Health Care’s financial troubles have deepened this summer

    When Pele Lewis arrived at Quality Community Health Care’s clinic in North Philadelphia Wednesday for his 1:30 p.m. appointment, he found the doors locked and a sign saying the clinic was “closed today.”

    Lewis was puzzled. “They called me this morning” with a reminder to come in, he said, as he stared at the door.

    The clinic, known as QCHC, was closed Thursday and Friday, as well, according to its phone message.

    “For many of our patients, QCHC is far more than a medical office,” its CEO, Helen Wilkinson, said in an email. “Members of our community are treated with dignity and respect regardless of their ability to pay.”

    She did not answer specific questions.

    The clinic at 2501 W. Lehigh Ave. began operating in 1981 under a federal program designed to provide medical and dental care in neighborhoods with few other options.

    Its troubles became public in the spring.

    After years of warnings from federal regulators that the clinic was delinquent on its audits, officials took the rare step in March of suspending it from the federally qualified health center program. At that time, audits for the years 2021 to 2024 were overdue. Now, the same is true for 2025. Typically such audits are due nine months after the fiscal year ends.

    Quality Community Health Care Inc., at 2501 W. Lehigh Ave. in North Philadelphia, was closed Wednesday. Management did not respond to emailed questions about the clinic’s status.Harold Brubaker / Staff

    A new audit

    In a small sign of progress, Quality Community Health Care last week posted an audit for the fiscal year that ended July 31, 2021, on a federal audit clearinghouse. Federal regulators had given a May 2 deadline to complete that audit or risk termination.

    The fiscal 2021 audit pointed to significant problems.

    “None of the data in it can be verified by the auditor,” said Steven Balsam, a professor of accounting at Temple University’s Fox School of Business.

    The auditor put it this way in the filing: “Because of inadequacies in QCHC’s accounting records, we were not able to obtain sufficient appropriate audit evidence for the amounts” stated in numerous categories of the financial statements.

    “I don’t know if just filing reports, if they look like this, is going to get them their funding back,” said Balsam, who reviewed the audit at The Inquirer’s request.

    The federal Health Resources and Services Administration, which regulates federally qualified health centers, has not responded to questions about QCHC since the suspension.

    Missed paychecks

    Some employees were not paid on July 10 and July 24, according to an email from the organization’s chief financial officer to staff Monday. This followed the organization not receiving the main federal funding for health centers, known as Section 330 grants, CFO Denise Ingram wrote.

    “QCHC is experiencing significant cash flow constraints following the suspension of 330 grant funding associated with the unresolved FY2021 audit submissions requirements,” Ingram wrote in the email obtained by The Inquirer.

    “QCHC remains committed to paying employees for all wages earned. Leadership continues to pursue funding, financing, and other lawful alternatives to address outstanding payroll obligations and restore normal operation,” the email said.

    Ingram did not respond to an emailed request for comment.

  • Bayada Home Health Care’s new CEO Bryony Winn wants to provide higher levels of care at home

    Bayada Home Health Care’s new CEO Bryony Winn wants to provide higher levels of care at home

    Bryony Winn became the CEO of Pennsauken-based Bayada Home Health Care in March after a career at two big Blue Cross health insurers and at the consulting firm McKinsey & Co.

    Those experiences, she says, prepared her to take the reins at one of the nation’s largest home health companies at a time when Bayada is wants to increase the intensity of its home care offerings — and get insurers to pay for it.

    “Hospitals are full,” and patients want to be at home, said Winn in an interview this month at Bayada’s headquarters in Pennsauken.

    The company, whose founder Mark Baiada converted it to a nonprofit in 2019, operates in 22 states and five additional countries, employs 44,000 people, and had $2.2 billion in revenue last year.

    Winn, Bayada’s first non-family CEO, grew up in Zimbabwe and went to college in South Africa. “Being around so many challenges and so much opportunity every day in the developing world, I always had a sense that I wanted to do things that made lives healthier,” she said.

    When she came to the United States in 2009 to work as a consultant in Chicago, it struck her how specialized and disconnected healthcare is here. “In the developing world, there’s not enough trained people, so it’s a much more connected system around patients and humans,” she said.

    The Inquirer spoke with Winn about the importance of taking care of people at home as the nation’s healthcare providers come under increasing financial strain. Questions and answers have been lightly edited for length and clarity.

    How did your jobs at McKinsey and at Blue Cross of North Carolina and Elevance Health prepare you to lead one of the nation’s largest home healthcare companies?

    I learned a lot about the U.S. healthcare system and became more and more convinced that this lack of connection was driving unsustainable cost, and I still think it’s driving unsustainable cost. Pre-COVID, I used to say affordability is the greatest healthcare crisis of our time. Then COVID really was for a while, and I think we’re back to that now. The quality of care here is amazing if you have a really rare form of cancer. I’d prefer for it to be treated in some of the amazing institutions here than anywhere else in the world. But if you are just a typical person, and especially an aging person here with two or three chronic conditions, you are pushed from pillar to post across a system who doesn’t ever see you as a human being.

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    What do you think you can accomplish at Bayada, which was founded more than 50 years ago, to address that connectivity issue?

    What I can bring to it is really understanding the place of home health in the entire healthcare ecosystem. This is the place where clients and patients want to be; they want to be in their homes. And so the question I’m asking is not what are the kinds of conditions that should be addressed at home, but rather flip that on its head and say, what are the kinds of capabilities you need in the home to be able to address things for clients who want to be there?

    What’s happening now that makes it so important to solve this problem?

    For two decades in healthcare, we’ve been talking about people aging into Medicare. Ten thousand people a day aging into Medicare. Now 10,000 people a day are 20 years older. They’re aging into 85 every day. Because it’s not a change in insurance, it doesn’t generate the same conversation. But it’s a huge change in health status. We now have all of these seniors with two or three chronic conditions, and with a decent chunk of life expectancy still. The delivery system really needs to shift in how we care for these folks.

    What has to change?

    One thing that’s needed is a collection of multiple services in the home. Very rarely do you need just skilled nursing. You need skilled nursing and a home health aide and potentially wound care. That requires care management, a much more connected ecosystem, versus what is today much more a siloed set of services. The second thing is we just need more intense care at home. We have done this quite successfully, and we’re doing it even more now around NICU babies [in partnership with Children’s Hospital of Philadelphia and insurers Highmark and Independence Blue Cross].

    Bryony Winn, who became Bayada’s CEO in March, said her background in health insurance will help the nonprofit expand by finding ways to get paid for new services.Bayada Home Health Care
    Do you see Bayada playing a broader role in health systems’ hospital at home programs?

    I do. We can serve higher-intensity patients at home with more complex care needs, and we do a lot of this today. We’re just not really paid for it, or it’s not the service that we’re meant to provide. So it’s really, how can we more sustainably do this high-intensity work at home? That’s a shift for us. Our clients want it. Wound care at home is hard. It’s one of the biggest reasons for readmission back into the hospital after post-acute discharge. How we can build really strong clinically evidence-based wound care capabilities is one of the big pieces that we’re looking at in this elderly population.

    Providing more intensive care has higher costs. How do you convince insurers to pay more, especially given the prevalence of Medicare and Medicaid in home health?

    There is not a ton of wiggle room, but this is where my background helps. I’ve worked on the payer side for a long time. They truly care about affordability and quality as well, and so it’s really working together to say how does what we need for our caregivers, clinicians, and ultimately clients map with what you can afford, and how do we build this together? I’m not sure home health has ever had those conversations as intently as we need to have them now. It’s a very fragmented industry. Hospitals have been having these more strategic conversations with health insurers for decades.

    Editor’s note: The caption with the main photograph has been updated to correct the name of the person Winn is speaking with. It’s Lillian Floyd, a nurse with Bayada’s Camden County Visits unit.

  • Tower Health is laying off 160 workers at Pottstown Hospital while expanding emergency department, behavioral health

    Tower Health is laying off 160 workers at Pottstown Hospital while expanding emergency department, behavioral health

    Tower Health is eliminating 160 jobs at Pottstown Hospital as part of an effort to bring staffing at the Montgomery County facility in line with lower patient volumes, the Berks County nonprofit announced Tuesday. The cuts amount to 22% of the workforce at Pottstown.

    In addition to the job reductions — which are more than the 131 positions cut last year at Pottstown — Tower also plans “a multimillion-dollar investment” to expand the emergency department, enhance inpatient and outpatient behavioral health services, and update portions of the hospital, Tower said.

    “These changes are designed to strengthen the hospital’s ability to serve local residents for generations to come by preserving access to the services patients need most, investing in the areas of greatest community need, and ensuring Pottstown Hospital remains a strong, sustainable community hospital for the future,” Tower said in a statement.

    To expand behavioral health, Tower will convert some underused general-purpose hospital beds to inpatient behavioral health beds. The behavioral health total will rise to 52 from 28, an 86% increase. Pottstown has 213 licensed beds.

    Tower did not provide a timeline for the changes but said it plans to hire 38 people to staff the expanded emergency department and behavioral health unit, which will have a separate entrance for the sake of patients’ privacy when they seek mental health services.

    Another change at Pottstown involves the lease of an unspecified amount of space to Community Health & Dental Care, a federal health clinic that was formed in 2008 with funding from Pottstown Area Health and Wellness Foundation.

    Unlike the restructuring Tower announced last fall at Pottstown, which included the closures of the combined intensive care/critical care unit, the Pottstown location of the McGlinn Cancer Institute, and the hospital’s endoscopy center, this round is not eliminating any services, Tower said.

    In the nine months that ended March 31, Pottstown has 5,104 inpatients, down 9.7% from the same period the year before. Most of that decline came in the first three months of this year, after Tower’s service cuts, according to data shared with bondholders.

    After last year’s layoffs, which included about 60 registered nurses represented by Pennsylvania Association of Staff Nurses & Allied Professionals, Pottstown employed about 700 people. Overall, Tower employs more than 10,000.

    The union said it still has 200 Pottstown nurses in its ranks. “We have been in touch with hospital management to better understand the context for and impact of the proposed layoffs and to push hard for solutions that protect both patient care and the dedicated nurses who serve the Pottstown community,” a union spokesperson said.

    Tower’s anchor is Reading Hospital in West Reading, Pa. In additional to Pottstown, it owns Phoenixville Hospital, plus St. Christopher’s Hospital for Children in North Philadelphia in a 50-50 joint venture with Drexel University. Tower previously owned Brandywine, Jennersville, and Chestnut Hill Hospitals.

    It closed Brandywine and Jennersville and sold Chestnut Hill to a group led by Temple University Health System.

    Tower recently announced that Jefferson Health, Nemours Children’s Health, and Temple University Health System are working on forming an alliance to support St. Chris clinically. Last week, Tower said that it had formed a clinical affiliation to expand advanced care in its markets.

  • George Norcross is donating $100 million to Cooper University Health Care

    George Norcross is donating $100 million to Cooper University Health Care

    George E. Norcross, longtime Cooper University Health Care board chair and political powerbroker, is donating $100 million to the South Jersey health system and its MD Anderson Cancer Center at Cooper, the nonprofit announced Tuesday.

    The gift, in honor of Norcross’ parents, is Cooper’s largest and among the largest ever to a nonprofit health system in New Jersey. It comes at a time when Cooper’s financial condition is stronger than it has been in decades and as the nonprofit pursues a $3 billion expansion in Camden.

    Cooper said it would add Norcross to its name but didn’t specify how.

    “For more than 50 years, our family has been dedicated to Cooper, and we are so proud to make this contribution to ensure that Cooper and the thousands of talented, committed professionals who make a difference every day for the people of Camden and South Jersey can continue the important work of investing in their future and in Camden’s continued renaissance,” Norcross said in the announcement.

    Norcross, chairman of insurance brokerage Conner Strong & Buckelew and a former owner of The Inquirer, was not available for an interview, a spokesperson said.

    The money will be used for investments in Camden and throughout Cooper’s South Jersey service area, which stretches to Cape May County since the acquisition of Cape Regional Health System two years ago. Priorities will be education and community programs that create jobs and training, Cooper said.

    Cooper had $2.9 billion in revenue last year and $144 million in operating profit. In June 2025, Standard & Poor’s raised Cooper’s credit rate to A+, its highest level ever and a substantial turnaround for a system that was near bankruptcy 25 years ago. The system has more than 14,000 employees.

    Norcross’ gift in context

    Norcross’ donation matches a $100 million gift in 2021 to St. Barnabas Medical Center in Livingston, now called Cooperman Barnabas Medical Center in honor of the donor, Leon Cooperman, a billionaire hedge fund manager.

    Holy Name Medical Center in Teaneck received a $75 million gift last year.

    The Norcross contribution to Cooper is bigger than gifts to other health systems in South Jersey.

    Virtua Health said last year that a $5 million pledge from the Marvin Samson Foundation was its largest gift ever. Marvin Samson, a local pharmaceutical entrepreneur, pledged the money for Virtua’s education and workforce development programs, Virtua said.

    Deborah Heart & Lung Center received a $5 million gift in 2019, which it called its largest ever. The specialty hospital in Browns Mills received $4 million in 2024.

    In Philadelphia, Comcast CEO Brian Roberts and his wife, Aileen, are giving Children’s Hospital of Philadelphia $125 million and will have their name on the nonprofit’s new $2.59 billion patient tower expected to open in late 2028, CHOP said last year. It was CHOP’s largest gift ever.

    Also last year, Penn Medicine received a $120 million gift from Catherine and Anthony Clifton and renamed its new, $1.6 billion Pavilion at the Hospital of the University of Pennsylvania the Clifton Center for Medical Breakthroughs.

    Norcross family ties to Cooper

    The Norcross family has deep ties to Cooper starting with Norcross’ father, George E. Norcross Jr., a labor leader who was on the Cooper Hospital board from 1976 to 1983. He died in 1998.

    Norcross III joined the Cooper board two years later and has been chair since 2006.

    Norcross’ mother, Anne Carol Conner Norcross, gave birth to four sons — George, John, Donald, and Philip — at Cooper. She devoted years of her life to helping seniors and underserved Camden residents, Cooper said. She died in 2016.

    Philip A. Norcross is vice chairman of Cooper’s board of directors and chairman of the Cooper Foundation. Alessandra “Lexie” Triem Norcross, George Norcross III’s daughter, is also on the Cooper Foundation board.

    Cooper’s expansion

    In addition to acquiring Cape Regional and embarking on a major expansion of its Camden campus, Cooper has been expanding its network of outpatient facilities in suburban South Jersey.

    It spent $150 million to open a three-story facility in a former Sears at Moorestown Mall in late 2023. In the year following the Cape Regional acquisition, Cooper added cardiology, oncology, and orthopedics specialists care to those offices in Cape May County.

    In June, Cooper said it plans to build a $300 million outpatient facility in Gloucester Township and expects to start seeing its first patients in specialties like cardiology, neurology, and oncology in 2029.

  • Tower Health and Jefferson Health have formed a clinical affiliation

    Tower Health and Jefferson Health have formed a clinical affiliation

    Tower Health and Jefferson Health announced Friday that they have formed a clinical affiliation that would expand access to advanced treatments in Tower’s markets northwest of Philadelphia.

    The two nonprofit organizations said Jefferson is not acquiring Tower, which is the biggest healthcare provider in Berks County and also owns two hospitals in Chester and Montgomery Counties.

    “Healthcare organizations today face unprecedented challenges, including inadequate reimbursement, rising costs, workforce shortages, and increasing competition,” Tower’s CEO Michael Stern said in an announcement to employees.

    “History teaches us that when an organization is confronted by challenges on multiple fronts, success depends on finding the right ally — one that shares our values, respects our strengths, and is committed to the same mission,” Stern’s note said.

    Jefferson said it routinely works with other health systems to provide high-level specialty care throughout the region it serves.

    “As part of that commitment, we are working with Tower Health to enhance access to advanced tertiary and quaternary services, bringing more specialized expertise, innovative treatment options, and coordinated care closer to the communities we serve,” Jefferson said.

    Details of the arrangement with Tower will worked out in the next few months.

    Jefferson is also among the Philadelphia-area health systems exploring a clinical alliance to support financially struggling St. Christopher’s Hospital for Children, which Tower manages and owns in a 50-50 joint venture with Drexel University.

    Turnabout for Tower

    For Tower Health, the potential collaboration with Jefferson represents a turnabout from a decade ago when the system based in West Reading plotted a move into the Philadelphia market. Tower spent $423 million for the acquisition of five community hospitals in Southeastern Pennsylvania from Community Health Systems Inc. in 2017.

    The idea then was that the health system’s anchor, Reading Hospital, would draw patients for the most advanced care to Berks County from the Philadelphia region. That deal led to massive losses as the anticipated patients didn’t materialize in Reading and then COVID-19 crushed health system finances nationwide.

    Tower sold or closed three of the five acquired hospitals, but remains saddled with a huge debt load. The interest payments leave the system with little money left over to invest in the new facilities and services. Last year, Tower instituted significant service cuts and layoffs at Pottstown Hospital.

    Jefferson has expanded through acquisitions from three hospitals to 33 since 2015. The most recent acquisition was Lehigh Valley Health Network two years ago, creating a network that stretches from South Jersey to near Scranton. The system has been losing money for years as management attempts to make the hospitals it acquired work as a financially sustainable system.

    This week, Jefferson sued Independence Blue Cross, claiming a series of five payment policy changes cost it nearly $100 million this year.

  • Jefferson Health sued IBX, claiming payment changes cost it nearly $100 million this year

    Jefferson Health sued IBX, claiming payment changes cost it nearly $100 million this year

    Jefferson Health says it has incurred nearly $100 million in financial losses this year because of policy changes by Independence Blue Cross in a lawsuit filed this week.

    The lawsuit, submitted Wednesday in Philadelphia Court of Common Pleas, detailed five policy shifts — including two impacting when IBX pays higher inpatient rates for hospital stays — that Jefferson says amount to breaches of the current contract between the region’s largest health system and its largest insurer.

    “IBX has attempted to use policy changes to — over time — effectively rewrite the contract” and pay less than agreed to in the contract, Jefferson’s lawsuit said.

    The suit comes less than six months before its IBX contract expires Dec. 31, adding pressure to negotiations over a new deal. Jefferson said it cared for more than 300,000 people with IBX insurance last year.

    In the last year, the nonprofit health system has shown its willingness to challenge major insurers at a time of increasing financial strain on both insurers and healthcare providers nationally.

    IBX introduced a series of payment changes impacting both commercial and private Medicare plans this year as it faces intense pressure from employers to slow the growth of healthcare expenses and from the federal government, which is trying to trim spending in Medicare Advantage plans.

    Independence declined in an email to comment on the claims in the lawsuit: “We value our provider partners, honor our contractual commitments with them, and regularly discuss any issues. It’s unfortunate that Jefferson chooses to do this in the public arena but if you’ve kept up with the news you can see this is typical of their playbook.”

    A series of reimbursement shifts

    The biggest financial impact came from IBX’s requirement, effective June 1, that certain procedures be performed in lower-cost freestanding ambulatory surgery centers, rather than in hospital outpatient departments, which often get paid twice as much for the same work.

    Jefferson estimated damages from the ambulatory surgery center rule at $35.4 million.

    Two policies affecting when IBX pays inpatient rates cost Jefferson a combined $35.5 million, according to the complaint.

    Jefferson sued Aetna in April over a similar policy that reduces payments for Medicare Advantage plans if Aetna considers patients not sick enough to qualify for full payment.

    The complaint says a policy that eliminated payment for hospital readmissions up to 30 days after discharge cost Jefferson $18.3 million. Since 2017, Penn Medicine has had a contract with IBX that does not pay Penn when patients return to the hospital within a month of being discharged.

    Finally, Jefferson said IBX has failed to pay more than $7.2 million owed under a controversial federal drug discount program known as 340B.

    “After trying to work directly with Independence Blue Cross to resolve these breaches of contract, we have been forced to take this action on behalf of our patients,” Jefferson’s vice president for payer relations, Allison Yudt, said in an email. “This action is the result of a pattern that has repeated itself time and again.”

    IBX said in its statement that it “acts in the best interest of our customers and members and protects their access to high quality affordable care.”

    Jefferson’s harder line with insurers

    Jefferson has expanded through acquisitions from three hospitals to 33 since 2015. The most recent acquisition was Lehigh Valley Health Network two years ago, creating a network that stretches from South Jersey to near Scranton.

    Amid significant losses in recent years, Jefferson has been taking an aggressive approach with insurers when it believes they are paying it less than contractually required.

    This year, Jefferson’s Lehigh Valley Health went out-of-network with UnitedHealthcare for commercial and Medicare Advantage plans. Last year, Jefferson went out-of-network with Cigna for a few weeks before reaching a deal.