DOJ: News Release

Public Hearing on Benefis Modification Request January 30 in Great Falls

HELENA — The Department of Justice will hold a public comment hearing on Benefis Healthcare’s request for modifications to the certificate of public advantage (COPA) on January 30, 2003 from 5 to 7 p.m. in the Commission Chambers of the Great Falls Civic Center. The department will also accept written public comments from Jan. 13-Feb. 14, 2003.

Attorney General Mike McGrath is accepting comment on the hospital’s request to modify the agreement that allowed the merger of Columbus Hospital and the Montana Deaconess Hospital to form Benefis Healthcare.

Under a 1995 law, the Montana Department of Justice was given the responsibility of reviewing proposed hospital mergers. The department is required to grant approval of a proposed merger if it finds that consolidation is likely to result in lower health care costs or improved access to health care or higher quality health care without any undue increase in health care costs.

The department’s approval of the Benefis merger came with extensive conditions, including regulations to ensure that savings from the merger were passed on to consumers and that both the scope and quality of services offered by the two hospitals were maintained.

In December 2002, Benefis asked McGrath to make several changes to the agreement governing the hospital’s operations, including adjusting a cap on revenues. The cap was imposed in an effort to ensure the consolidated hospital passed along lower prices to consumers.

The hospital is asking for permission to:

  • modify the cap on revenues by increasing the inflation factor used to calculate Benefis’ allowable revenues by 1 percent each year from 2002-2005. With the modification, Benefis would be allowed the inflation factor plus 1 percent in 2002, the inflation factor plus 2 percent in 2003, the inflation factor plus 3 percent in 2004, and the inflation factor plus 4 percent in 2005.
  • modify the cap on revenues by excluding non-operating income from the revenue cap formula. This would exclude investment income from the cap.
  • eliminate several reporting requirements that are no longer relevant.
  • report on the quality of care quarterly rather than annually.
  • alter the quality of care indicators that are reported.
  • conduct employee and medical staff surveys every three years rather than annually.
  • allow Benefis to enter exclusive contracts with all hospital-based physicians.
  • allow Benefis to enter into equity type relationships with physicians.

The requested changes are outlined in Benefis’ request for modification which is available on the Department of Justice website.

Written comments on the hospital’s request may be submitted to Attorney General Mike McGrath, Justice Building, 215 N. Sanders, Helena, MT, 59620, or via e-mail at Comments will be accepted until Feb. 14, 2003.

All comments will be forwarded to Benefis and it will be given an opportunity to respond to them. McGrath said he plans to make a decision on the hospital’s request after all the comments and responses have been reviewed and the department’s consultants have completed an independent analysis.

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