The Robert Wood Johnson Foundation has been a leading financial supporter of studies which conclude that hospital mergers lead to unjustifiable price increases. (Position 1).

One of  it’s signature studies has been reviewed in detail by the Washington, DC regulatory watchdog the Center for Regulatory Effectiveness (CRE).  CRE has concluded that the study violates the Data Quality Act and therefore can not be used by any federal agency as a basis of making policy or issuing regulations.

On the other hand the other hand the Foundation’s namesake hospital, the Robert Wood Johnson University Hospital, whose former board member is now the Chairman of the Board of Trustees of the Foundation, has now merged with another hospital. (Position 2).

The Centers for Medicare and Medicaid Services (CMS) is seeking approval under the Paperwork Reduction Act to reinstate a previously approved collection of information, “Medicare Geographic Classification Review Board (MGCRB) Procedures and Supporting Regulations.”  According to CMS,

The information submitted by the hospitals is used to determine the validity of the hospitals’ requests and the discretion used by the Medicare Geographic Classification Review Board (MGCRB) in reviewing and making decisions regarding hospitals’ requests for geographic reclassification.

Comments on CMS’s request to reinstate the collection of hospital data are due to CMS in 6o days.  The Federal Register notice is attached here.

Editor’s Note:  As  federal regulators continue to amass a new litigation force against hospital mergers they should be cognizant of the enormous impact they have on increasing local employment.  They should also recognize that a signature study which argues that the resultant mergers increase costs is inaccurate as reported in a study conducted by the Center for Regulatory Effectiveness (CRE).

To the extent there are “costs” associated with mergers through justifiable price increases necessitated by decreasing federal payments and an increase in the number of uninsured visiting the hospitals, how do the regulators address these “regional” costs relative to the “regional” benefits which result from increased employment?

The Centers for Medicare and Medicaid Services (CMS) has issued an Interim Final Rule with Comment Period in the matter of “Medicare Program; FY 2014 Inpatient Prospective Payment Systems: Changes to Certain Cost Reporting Procedures Related to Disproportionate Share Hospital Uncompensated Care Payments.”  Comments are due to CMS by November 29, 2013.

The CMS Interim Final Rule is attached here.

Editor’s Note:  The hospital industry is in urgent need of  a systemic strategy  to address its critics including a  focus on the Press and Federal regulators including the FTC, DOJ and CMS. An inital step is this report prepared by CRE.

Editor’s  Note:  CRE  provided a copy of its report, which identified the deficiences in a signature study which claimed that based upon its analysis hospital price increases are a result of the excessive clout of hospitals, to the author of the following article. Much to his credit the author’s conclusions were  caveated.

Robert Weisman  Boston Globe

Hospital mergers may drive up costs

WSB-TV Atlanta

Health care law leaves Grady $45 million short

ATLANTA — In an ironic twist, Grady Memorial Hospital faces a $45 million funding loss directly related to a new health care law designed to benefit the hospital.

The result could mean major cuts at Georgia’s largest trauma center, according to Channel 2’s Lori Geary.

Danielle Words is an uninsured hospital patient who uses Grady as a safety net because it cares for thousands of uninsured Georgians.

If I didn’t have this resource, I’d really be in big trouble,” Words said. “It’s very important to me.”

By Center for Regulatory Effectiveness

      WASHINGTON, Sept. 30, 2013 — /PRNewswire-USNewswire/ — Martin Gaynor, the newly appointed head of the FTC Bureau of Economics, begins his job this week. One of the documents on his desk is a recently completed report by the Center for Regulatory Effectiveness (CRE) which demonstrates that a key study cited by authorities regarding the effects of hospital consolidation is inaccurate.

The CRE report tilted: “A Signature Study on Hospital Consolidation Violates the Data Quality Act” was prepared by former White House Office of Management and Budget officials who were the initial proponents of the Data Quality Act.