DOJ: News Release

Department of Justice Issues Decision on Changes to Benefis Operating Agreement

HELENA — Attorney General Mike McGrath Monday issued a decision on a request from Benefis Healthcare to change its certificate of public advantage (COPA). The order allows the Great Falls healthcare center to exclude investment income from its revenue cap and add 1 percent to the inflation index used to calculate allowable revenues in 2002, 2 percent in 2003 and 2.5 percent in 2004 and 2005. The inflation increase approved is less than Benefis requested.

The decision follows the department’s denial of a request from the Great Falls healthcare center to end all state regulation. Benefis had also suggested two other changes to the revenue cap but withdrew them before the latest request was made.

“These modifications strike a balance between reasonable prices for consumers and financial strength for Benefis,” McGrath said. “It’s in everyone’s best interest to have a strong, viable hospital for Great Falls. We believe the changes to the revenue cap will help ensure that.”

Under a 1995 law, the Montana Department of Justice was given the responsibility of reviewing proposed hospital mergers. The DOJ 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 Justice 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 the scope and quality of services were maintained.

McGrath said outside experts have recognized that the Great Falls merger has resulted in significantly lower prices.

“Our consultants tell us that consumers in Great Falls have received the benefit of merger-related savings in the form of lower prices,” McGrath said. “Prices at the Great Falls hospitals were among the highest in Montana prior to the merger. Among hospitals of its size, Benefis now has among the lowest prices in the state.

“Benefis and its management team are to be complimented,” McGrath said. “They’ve kept health care accessible and reasonably priced but haven’t sacrificed quality.”

Monday’s decision also granted Benefis permission to:

  • enter into exclusive contracts with anesthesiologists.
  • conduct employee and medical staff surveys every two years rather than annually. Benefis had requested a three-year interval.
  • eliminate several reporting requirements that are no longer relevant.
  • alter the quality-of-care indicators that are reported but maintain quarterly reporting. Benefis had requested annual reporting.

The decision also solicits comment on the future role of the Regional Community Health Council. The council is a volunteer board originally created to respond to patient complaints.

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