INSIDE THE ISSUE

> Last-Minute Steward Decision
> Contempt Charge Against de la Torre
> Filling the Steward Gaps
> Healthcare Proxies & Agents
> Assault on 340B
> Harm Reduction
> MassHealth Medical Respite Program
> Respiratory Ailment Season

MONDAY REPORT

Sunday Court Hearing: Potential Road Bump Resolved in Hospital Sales

The effort to sell off six Steward Health Care hospitals in Massachusetts hit an apparent roadblock last week that seemed to be resolved during a two-hour emergency hearing yesterday (Sunday) in the Texas bankruptcy court overseeing the dissolution of Steward.

As has been widely reported, Lawrence General Hospital agreed to buy Steward’s Holy Family Hospitals in Methuen and Haverhill for $28 million; Boston Medical Center bought Steward’s Good Samaritan in Brockton and St. Elizabeth’s in Brighton for $145 million; and Rhode Island-based Lifespan bought Morton Hospital in Taunton and St. Anne’s in Fall River for $175 million. The total $348 million for the six hospitals went to the mortgage holder of the properties – ACREFI CS U, LLC, which is also known as Apollo Commercial Real Estate Finance, Inc.

However, the bankruptcy judge, Christopher Lopez, said in early September that he would place $17 million of the total $348 million into an escrow fund to be dispersed to non-Apollo, so-called FILO creditors, who funded the furniture, fees and equipment that allowed the hospitals to operate. When Lopez re-directed the $17 million on September 9, Apollo’s lawyers objected. And last week, they filed a statement with the court saying they would not close the deals with the buyers unless they “receive the full purchase price” it negotiated with the three buyers. That is, the mortgage holders were not willing to part with the $17 million.

Lawrence General, BMC, and Lifespan then immediately filed their own statements with the court saying they were unwilling, and unable, to offer more money to Apollo. BMC wrote its $145 million to Apollo is “BMC’s best and final offers for the hospitals.” Lifespan told the court that if Apollo refuses to consummate the deal because of a dispute with the $17 million allocation, then the whole deal falls apart, adding, “The sale of the Hospitals cannot close without the real estate.” (Lawrence General is in a slightly different position since none of its $28 million purchase price for the Holy Family hospitals is being directed to the escrow fund; the $17 million is coming entirely from the BMC and Lifespan purchases.)

The Commonwealth of Massachusetts provided $30 million in August and $42 million through September to keep the six hospitals operating through September 30. Because that money runs out today, the deals have to close immediately, which is why Judge Lopez, who was travelling last week, scheduled the rare Sunday hearing, during which the parties took three 20-minute breaks to work out the deal among themselves.

On Sunday morning, Massachusetts filed a statement with the court urging Lopez to reject the FILO creditors’ claim on the $17 million.

“The havoc being rained down on individuals who get healthcare at these hospitals, who are employed by these hospitals, who use these hospitals as centers for their communities by continued uncertainty about transfers must stop, and the risk of disrupted healthcare and patient safety has to end,” Attorney General Andrea Joy Campbell wrote.

Yesterday’s court action appeared to resolve the issue. The parties suggested that Massachusetts contribute $5 million that would be put into a fund for the FILO lenders as opposed to the BMC and Lifespan contribution totaling $17 million. That allows the full agreed-upon amount of the sales ($348 million) to go to Apollo. Attorney Andrew Troop of the law firm Pillsbury Winthrop Shaw Pittman, who is working as Special Assistant to the Massachusetts Attorney General, was tasked last night with helping to secure state government sign off on that funding.

Concurrently, Steward and the other parties will work to fast-track the sale of “excess property” – that is, parcels abutting or near existing Steward hospitals, the proceeds of which could be directed to the FILO creditors. The agreements will also be re-drafted to include “adequate protection” language for the FILO lenders.

That was enough to satisfy Lopez, who agreed to sign new orders allowing the sales to go through.

Eminent Domain and HPC Review

While it appears that the deals will close, one sale – that of St. Elizabeth’s in Brighton to BMC – has a complicating factor. On Thursday, September 26, Governor Healey signed an order to take the approximately 14 acres of St. Elizabeth’s property in Brighton by eminent domain. The state in August had offered $4.5 million for the property, which Apollo rejected.

“While Apollo continues to put its greed ahead of the health and wellbeing of the people of Massachusetts, we are taking action to make sure St. Elizabeth’s remains open. By transferring operations to Boston Medical Center, we will protect access to care for tens of thousands of patients and save thousands of jobs,” Healey said in a statement last week.

For its part, Apollo has said the St. E’s property is prime real estate that is valued at $200 million by the City of Boston, and that the 2024 property tax amounts to $5.1 million. “It is not remotely plausible that one year’s worth of tax payments for a property such as the real estate interest in St. Elizabeth’s could exceed its proposed fair market value,” Apollo wrote in a September land court filing against Massachusetts. So, while the property will transfer, the courts will likely have to resolve the eminent domain taking in the future.

And Last Friday, the Health Policy Commission announced that it had completed its review of the Steward hospital sales and decided that it would not proceed further and conduct a full and lengthy Cost and Market Impact Review. “While the proposed hospital transactions represent significant changes to the Massachusetts healthcare market, the HPC’s initial reviews did not uncover evidence that these transactions are likely to significantly increase healthcare spending or negatively impact market functioning,” the HPC wrote.

HPC added that the sale of Steward’s physician group, Stewardship Health, to a subsidiary of private equity firm Kinderhook Industries “remains open and ongoing.”

Senate Advances Contempt Charges Against Steward CEO; He Resigns

The U.S. Senate voted last Wednesday to refer to the U.S. Attorney’s Office criminal contempt charges against Steward Health Care CEO Ralph de la Torre for failing to honor a subpoena compelling him to testify before the Senate’s Health, Education, Labor and Pensions (HELP) Committee on September 12. If ultimately found guilty of the misdemeanor charge of “refusal of witness to testify or produce papers,” de la Torre could face fines of up to $1,000 and jail time of up to 12 months.

“The Senate has not made a criminal contempt referral in more than 50 years, since 1971,” Senator Edward Markey (D-Mass.), a member of the HELP Committee, said from the Senate floor. “It is a rare move for the rare degree of callousness, cruelty, and cowardliness that Dr. de la Torre has demonstrated.” Markey said de la Torre is using “his blood-soaked gains to hide behind corporate lawyers instead of responding to the United States Senate’s demand for actions.”

On Saturday, de la Torre announced that he was resigning as board chairman and CEO of the bankrupt Steward entity, effective tomorrow October 1. The reaction from regulators, policy makers, elected officials, and others in Massachusetts was essentially: good riddance.

MHA’s President & CEO Steve Walsh said, “MHA and our member hospitals are not focused on one individual at Steward – we are instead focused on the millions of individuals who are now left to navigate a damaged healthcare system and supporting the transition of Steward’s facilities to trusted operators. The past 10 months have only worsened the crises being felt by every hospital and patient in the commonwealth. We will continue to advocate for the supports and flexibilities that providers will need to recover and close this very sad chapter for Massachusetts healthcare.”

State Creates Work Groups to Investigate Steward Closure Gaps

With the closure of Steward’s Nashoba Valley Medical Center in Ayer and Carney Hospital in Dorchester, the state and healthcare community are pondering how best to fill the coverage holes in the communities the closures affected.

In the immediate aftermath of Nashoba’s closure, the nearest hospital to it – UMass Memorial Health’s HealthAlliance-Clinton Hospital – has been filled to capacity and the UMass system has once again been forced to increase its traveler nurse budget. Emerson Health has also seen surges. Carney’s service area has closer hospital alternatives but the loss of the Dorchester facility was met with frustration from the community. Surrounding hospitals, including Beth Israel Lahey Health Milton and South Shore Hospital, to name just two, have seen increased patient volumes.

Last week, the Healey-Driscoll Administration announced the formation of two working groups to focus specifically on “stabilizing and revitalizing” healthcare in the affected communities.

The Nashoba workgroup will be co-chaired by Joanne Marqusee, assistant secretary in the Executive Office of Health and Human Services, and Ayer Town Manager Robert Pontbriand. Marqusee was CEO of Cooley Dickinson Hospital from 2014 to 2021 and then served as Executive Vice President/Chief Integration Officer at Tufts Medicine for 20 months before moving to EOHHS.

The Carney workgroup will be co-chaired by Bisola Ojikutu, M.D., Boston’s commissioner of public health, and Michael Curry, president and CEO of the Massachusetts League of Community Health Centers.

The working groups will include providers that serve the respective communities, including hospitals, community health centers, physicians, public health officials, labor leaders, emergency service providers, community leaders, and elected and local government officials. There will be forums through which community members may provide feedback.

“Our administration recognizes the widespread impacts that a hospital closure has on its community,” said Governor Maura Healey. “Massachusetts is home to the brightest minds in healthcare, human services, education, business and government. We’re going to bring together community and industry leaders to develop a game plan to not only protect but improve healthcare in the regions most impacted by Steward’s greed and mismanagement.”

Health Agents & Proxies: Fulfilling Patient Wishes & Easing Transfers

In response, MHA and a coalition of local healthcare organizations teamed with the Massachusetts Department of Public Health (DPH) to urge providers, colleges, public health departments, and other entities to encourage people over age 18 to choose a healthcare agent and complete a healthcare proxy. For hospitals, the ask is for all patients to be offered agent/proxy documents at some point during their admission.

In a letter they co-signed, MHA’s V.P. of Clinical Affairs Patricia Noga, R.N., and DPH Commissioner Robbie Goldstein, M.D., write, “As you know, the Health Care Proxy document is the first step in the guardianship process. Without this, there may be a delay in moving patients to the appropriate level of care. Not having a designated decision maker or documents in place may also lead to delays in providing care according to the wishes of an individual. This is not only an issue for our aging population; in an emergency situation, it is important to have someone who can understand and advocate for a patient’s wishes.”

DPH and MHA partnered with Honoring Choices Massachusetts to make available a free healthcare proxy document in 15 languages, as well as material explaining the process of choosing an agent. An Honoring Choices Quick Start page also provides information on how to create a healthcare proxy wallet card or download a personal directive (or living will).

MHA and Honoring Choices Massachusetts launched the “Simple Step” campaign in April of 2023, and are making no-cost communications and messaging materials available to organizations that wish to participate. Other campaign partners include the Massachusetts Medical Society, Home Care Alliance of Massachusetts, Massachusetts Senior Care Association, LeadingAge Massachusetts, Hospice and Palliative Care Federation of Massachusetts, and Mass Home Care.

The materials can assist hospitals and other organization in integrating the health agent/proxy campaign into their communications and community outreach workflows. Some believe the best place for such conversations to occur is in a primary care physician’s (PCP’s) office where patients in non-critical settings can ask questions. Sturdy Health, for instance, is providing co-branded forms and flyers to its PCP practices.

“We know that many of our member hospitals are already down the path of incorporating this ask into their workflow, or branding and building their own websites to make it easier for patients and staff to get the message out,” said MHA’s Noga. “Now in the face of a throughput issue that has up to 1,000 or more patients stuck in hospitals unable to transition to the next level of care, this campaign has become of the greatest importance.”

Another Pharmaceutical Company Attempts to Circumvent 340B

Johnson & Johnson is the latest pharmaceutical company attempting to circumvent the 340B drug program’s regulations and, in doing so, has come under fire from a bipartisan coalition in Congress as well as the federal Health Resources and Services Administration (HRSA) that sent a cease-and-desist letter to the company.

At issue is J&J’s plan, effective October 15, to force disproportionate share hospitals (DSH) to purchase two drugs (Stelara and Xarelto) at the commercial price, at which time J&J “may” offer rebates to them. However, the whole intent of the 340B program is to offer DSH and other providers a discounted drug price that is set by negotiations between drug manufacturers and U.S. Health & Human Services. That is, the drug companies can’t force the purchase of drugs at a higher price and then decide at a later date to provide a discount; the 340B program requires them to offer the discount initially.

“In other words, J&J’s rebate proposal would require disproportionate share hospitals to purchase Stelara and Xarelto at prices that exceed ‘the maximum price[s] that covered entities may permissibly be required to pay’ for those drugs,” which is in violation of 340B, HRSA wrote to J&J on September 17.

Last Friday, September 27, HRSA sent J&J a final stern warning demanding notification by today that J&J “has ceased implementation of its rebate proposal.” If not, HRSA said it may remove J&J from the 340B program and refer the case to HHS’s Officer of Inspector General.

Meanwhile, more than 160 members of the U.S. House of Representatives, both Democrats and Republicans, signed on to a letter to HHS Secretary Xavier Becerra slamming J&J’s “unapproved and unlawful” change to the 340B program. Nearly the entire Massachusetts delegation signed on to the letter.

“J&J, or any other manufacturer, does not have the statutory authority to unilaterally restructure the 340B program by determining when, how, and to what subset of drugs or covered entities the upfront 340B discount is provided,” the House members wrote. “… J&J’s proposed rebate model violates the statute by requiring providers to purchase drugs at a high sticker price and submit data to the manufacturer for ‘validation.’ J&J’s rebate model hijacks HRSA’s oversight role and delays the benefit of the 340B price until some undetermined date. This approach is to the manufacturer’s financial benefit because the company retains those sums for a longer time and creates hurdles for covered entities to claim the discount.”

Closer to home, Massachusetts hospitals have also ramped up their defense of the 340B program given mounting threats from the pharmaceutical industry.

DPH Encourages Harm Reduction, Will Protect Caregivers for Their Efforts

DPH has issued new guidance on how healthcare settings can reduce harm to people who use drugs (PWUD), including notice that DPH will not discipline licensed healthcare professionals who provide harm reduction supplies and services to patients.

Under the new guidance, if a healthcare worker provides, among other harm reduction supplies, sterile syringes, Fentanyl test strips, or “cookers” that are used to mix and heat drugs before use, the worker will not be disciplined by the various state licensing boards.

“Direct provision of harm reduction supplies or services by healthcare providers and referral to harm reduction services in community settings are lifesaving actions that are appropriate to clinical settings,” DPH writes in its memo.

MHA and its Equity and Addiction Workgroup collaborated with DPH’s Bureau of Substance Addiction Services (BSAS) to address implementation of harm reduction principles and practices across healthcare settings. The DPH memo details what sort of harm reduction supplies and services can and should be provided to PWUD, including syringes, Naloxone, test strips, wound care, and overdose education, among others. DPH also lists resources healthcare providers can use when promoting safer smoking, safer sex, and better hygiene to PWUD.

Approximately 2,125 people in Massachusetts died from opioid-related overdoses in 2023, a 10% drop from 2022 when the state had a record 2,357 fatal opioid-related overdoses. Despite these reductions, persistent disparities in opioid overdose deaths remain for black non-Hispanic, Hispanic, and American Indian non-Hispanic individuals.

MassHealth Medical Respite Program Advances

Following the successful CMS approval of MassHealth’s recent waiver amendment permitting coverage for medical respite services for homeless and housing unstable patients, MassHealth is holding virtual public hearings on Wednesday October 9, regarding proposed regulations to implement this proposed coverage and reimbursement in 2025.

People experiencing homelessness have high rates of chronic medical conditions and experience multiple barriers to hospital discharge, including lack of a safe and appropriate location to recover. MassHealth created a medical respite pilot program and then developed a coverage and reimbursement model that is the focus of the proposed regulations. The program seeks to provide a safe space for people experiencing homelessness to recover from their physical illness for up to six months; offer a temporary clinically enriched housing option for people experiencing homelessness, while engaging them in searching for an appropriate long-term housing option; improve hospital discharge rates, reducing hospital lengths of stay, and decreasing total cost of care for people experiencing homelessness; and build partnerships and strengthen coordination between housing and healthcare providers.

The proposed homeless medical respite services will be available to both MassHealth patients in managed care and fee-for-services programs.

Respiratory Ailment Season

Summer is over, which means that respiratory ailment season is underway.

Updated immunizations are available for all three major fall and winter respiratory diseases – flu, COVID-19, and Respiratory Syncytial Virus (RSV).

CDC’s Advisory Committee on Immunization Practices recommends routine annual influenza vaccination for all persons over age 6 months who do not have contraindications. COVID-19 vaccination is recommended for everyone ages 6 months and older. Very young children and older adults are at greatest risk from RSV infection. Everyone 75 years of age and older should receive RSV vaccination if they haven’t been previously vaccinated.

This DPH dashboard shows hospital admissions and ED visits related to acute respiratory diseases.

In a related story, the federal government last week announced the availability of free COVID-19 test kits. Households can order four free, over-the-counter tests by visiting COVIDtests.gov. The site also contains a list of extended expiration dates for any old, unused tests people may have.

John LoDico, Editor