Bill would repeal law that led to Ballad Health creation

NASHVILLE, Tenn. (WJHL) — Citing what they claim are serious disadvantages to the communities it serves, two Democratic Tennessee legislators from outside Northeast Tennessee have filed a bill to repeal and replace the section of law that enabled the creation of Ballad Health.

“We’ve got lots of problems here, and it doesn’t look that like they are moving in a direction of solving these problems,” Rep. Gloria Johnson (D-Knoxville) told News Channel 11 Thursday, the day after filing the bill. “It’s not getting better, it’s getting worse.”

Ballad declined a requested interview but said the opposite in a statement Thursday. It said claims about poor quality of care, lack of transparency and abuse of monopoly power — among other criticisms — are inaccurate and that if the bill became law patients in Northeast Tennessee would see worse, not better, health care.

“This bill, if passed, would expose our hospitals to closures, which were occurring before the creation of Ballad Health, and it would sacrifice … important new services,” the statement said.

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Greeneville Republican Rep. David Hawk, meanwhile, said while he believes the bill has no chance of passage, he does believe improvements are needed at Ballad.

“Ballad Health is far from perfect, and they should be more accepting of constructive criticism from other healthcare professionals in the region,” Hawk said. “I’m also hearing from constituents … about their health outcomes, and most of the time I’m hearing negative outcomes.”

Sponsored by Johnson and Sen. Heidi Campbell (Nashville), SB2620/HB2600 calls the creation of Ballad “an economic experiment allowing monopolies” that has resulted in “clear evidence of public harms” since the hospital system was created in 2018.

Tennessee’s Hospital Cooperation Act of 1993 was amended to allow for the merger of Ballad predecessors Mountain States Health Alliance and Wellmont Health System. Their merger, which the Federal Trade Commission (FTC) actively opposed, created an inpatient hospital monopoly that was shielded from formal FTC efforts to sue over antitrust violations due to the Tennessee legislative action and a similar change in Virginia law.

The law change included a pledge that, according to the proposed bill, “state supervision by the department of health and the attorney general and reporter could assure that public benefits would outweigh public harms.”

Johnson said a repeal would open Ballad to potential antitrust action from the FTC.

“The current supervision has proven to be a failure, a sham,” she said. “Without the ‘active supervision’ provision in the existing law, they would be subject to antitrust regulation/oversight and healthcare oversight like every other hospital/healthcare system.”

That language is in the current law and is required to meet the so-called “state action immunity” requirement that shields monopolies from antitrust action. It’s summed up in the acronym that enables the Ballad system — a “Certificate of Public Advantage” or COPA. Each year the Department of Health and Attorney General must determine whether that “public advantage” continues to exist over what would exist without Ballad or an enabled inpatient monopoly.

‘The COPA experiment has shown that benefits to the public do not outweigh the disadvantages and harms.’

TN House Bill 2600

Johnson said she’s spoken to numerous people in Northeast Tennessee and concluded, as the bill states, “there is now clear evidence of public harms” from Ballad.

The bill itself cites a list of such alleged harms. They include a failure to meet annual charity care obligations and low-quality ratings that reflect poor quality for patients.

Ballad COPA Bill by Murry Lee on Scribd

The bill also claims that rather than actively supervising Ballad in a way that benefits Northeast Tennessee, the Department of Health and Attorney General’s office have allowed harm by “loosening original restrictions designed to protect the region against abuse and exploitation of monopoly power.”

Among the changes the bill cites are ones “allowing Ballad Health to oppose any certificate of need application by competitors and allowing Ballad Health to restrict healthcare employment and practice opportunities with restrictive non-compete covenants.”

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Johnson said she believes that by repealing the law and putting Ballad back in the same oversight camp as other hospitals, “there will be the oversight to clear these things up and to ensure that the problems that we’re seeing are moving in the opposite direction, getting better instead of getting worse.”

Ballad’s statement pushes back at all the claims.

“The bill makes inaccurate statements the legislature cannot rely upon,” the statement says.

“For instance, Ballad Health has a more generous charity care policy providing more free care to low-income Tennesseans than hospitals in the districts of the authors of the bill; an increase in access that would not have happened if Ballad Health had not been created.

“Further, the bill ignores that Ballad Health is scored on quality of care measures by the States (Tennessee and Virginia). The majority of Ballad Health’s quality of care measures scored by the states are currently performing better than 90 percent of hospitals in America.”

Johnson said she stands by the bill’s claims.

“Let’s see his data because the data that I’ve seen says that these (claims) are accurate,” she said. “So my concern here is, you know, show me what you got then, show me the different picture, show me the actual data that proves that this is not accurate.”

While David Hawk said he sees “zero opportunity” the Johnson/Campbell bill becomes law, he added that he’s open to some tweaking to the regulatory oversight of Ballad, which is largely outlined in what is called “Terms of Certification.”

“I think there can be improvements to the certification,” Hawk told News Channel 11. “I’m not exactly sure what that language looks like at this moment, but I have to think there’s a better way, a more inclusive way to operate the system that we have now.”

Hawk said he’s heard consistent complaints from patients, employees (mostly former employees) and non-Ballad health care practitioners — either about their care, their treatment as employees or in the case of other practitioners, Ballad being difficult to work with or engage in fair competition with.

“There have been impediments thrown up to these different physician groups, and I would love to see everybody on the same page, talking about health outcomes as opposed to everybody trying to get their little niche of a limited health care market in the region,” Hawk said.

He said “we’re never going to agree 100%,” but that “there needs to be some type of a way for Ballad to accept this criticism in a way and integrate that into becoming better.

“What I’m seeing now from many of the folks at Ballad are defensive mechanisms being put up and marketing saying, ‘don’t believe your lying eyes, you really had a great experience’ when many of my constituents are telling me it was not a good experience,” he said.

“There’s an opportunity for us all to learn from this situation and I want to be part of the solution.”

Hawk said right now, even area legislators don’t know quite where to turn with questions and concerns.

“Exactly who has oversight? Is it the health facilities commission?” Hawk asked. “Is it the Attorney General’s office? Is it the Commissioner of Health in the State of Tennessee?

“Exactly who do we talk to if we’re not heard by the higher levels of folks at Ballad Health? Where do we go from there? We’re really not getting a good answer to that question.”

For her part, Johnson said she’s open to amending the bill.

“I would absolutely be open to coming to the table on this and discussing ideas,” she said.

But she doesn’t want to see another COPA arise in Tennessee.

“I’m certainly willing to work with anybody that has an interest in making sure that these hospitals, that this monopoly idea doesn’t happen again, and that these hospitals are getting the oversight that they desperately need,” Johnson said.

“The lawyers I talked with, it’s their understanding that this will handle it through all the other rules and oversight guidelines for other hospitals,” she said. “If we need to attach some bit of language to make that clear, we will absolutely do that.”

Hawk has his criticisms of Ballad, but said he still believes the creation of the COPA came about carefully and because of good reasons.

“The financial fear of multiple hospital closures in the region was real,” he said, adding that it’s definitely an arguable point that things would be worse without the merger.

“It’s hard for the average citizen to accept that, especially when they’re having a negative outcome,” he said. “That that’s a very difficult conversation to have with folks who are saying, ‘I sure wish I still had (Takoma hospital) to go to’ or ‘I sure wish I still had Laughlin Hospital’ so it’s a tough decision, and many folks don’t want to recognize that finances were in a dire situation several years ago.”

Takoma and Laughlin were Greeneville’s two hospitals, and Ballad has merged them into one, using Takoma for a different purpose — one that it says has provided benefit to the region and was only possible because of the merger and COPA.

Here is Ballad’s entire statement:

The bill sponsors live in urban communities elsewhere in Tennessee, so we can understand why they may not be sensitive about access to healthcare for rural Tennesseans. The reality is that Tennessee’s rural communities have had the second-highest number of hospital closures in America. Today, due to the wisdom of the state legislature, every community in Northeast Tennessee that had a hospital before the Certificate of Public Advantage (COPA) was created, still has one, and we have been able to expand services, such as new pediatric emergency departments, new pediatric specialist physicians, addiction care programs for pregnant women, new dental residency programs and provide care for thousands of uninsured Tennesseans. This bill, if passed, would expose our hospitals to closures, which were occurring before the creation of Ballad Health, and it would sacrifice these important new services created due to the COPA.  

The bill makes inaccurate statements the legislature cannot rely upon. For instance, Ballad Health has a more generous charity care policy providing more free care to low-income Tennesseans than hospitals in the districts of the authors of the bill; an increase in access that would not have happened if Ballad Health had not been created. Further, the bill ignores that Ballad Health is scored on quality of care measures by the States. The majority of Ballad Health’s quality of care measures scored by the states are currently performing better than 90 percent of hospitals in America.

We are proud that U.S. News & World Report ranks Holston Valley Medical Center as the ninth-best hospital in Tennessee, and that Blue Cross and Blue Shield of America cite several Ballad Health hospitals as among the best in the nation for several specialties, including obstetrics, orthopedics and cardiology.

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