KINGSPORT’S BALLAD HEALTH PROTEST ENTERS 40TH DAY
Residents in the Sullivan County/Kingsport, TN area have just entered their 40th day of protesting a recent hospital merger that will put the health care of many at risk. The merger is a demonstration of the intersection between political and corporate corruption.
Dani Cook, a local advocate from Bristol, Tennessee, explains the situation in detail below… And watch our brief VIDEO from Day 39:
BALLAD HEALTH:
Where Apparent Healthcare, Political, & Corporate Corruption Meet
In one of the most unusual healthcare-related actions ever taken by 2 states, State Senators, Representatives, Departments of Health, Attorneys General, and Community Business and Education Leaders joined together with two separate healthcare systems to create a medical monopoly, intentionally displacing competition and granting state and federal antitrust immunity.
The State of Tennessee and the Commonwealth of Virginia have executed a “COPA” – a Certificate of Public Advantage/Cooperative Agreement – unlike any in the history of healthcare in America.
The COPA annual review has just finished, and the TN Health Dept. couldn’t “grade” Ballad Health as laid out in the Terms of Certification. Because the Terms of Certification included a Plan of Separation requiring Wellmont Health System, Mountain States Health Alliance, and Ballad Health (the new health system) to keep 90% of their assets separate for the first 18 months after the COPA was issued, there is a unique window of opportunity to have the COPA modified or terminated!
The COPA law states:
“This COPA is subject to modification if at any time the Department (of Health) determines the likely benefits resulting from the Cooperative Agreement no longer outweigh any disadvantages attributable to any potential reduction in competition that may result from the Cooperative Agreement.
This COPA is subject to termination if the Department determines the benefits resulting from the Cooperative Agreement no longer outweigh any disadvantages attributable to a reduction in competition that may result from the Cooperative Agreement, and modification of the COPA is not obtained.”
Since the COPA has been executed, there have been reductions in pay, changes in services, repurposing and deletions of services, and a severe reduction in access to quality healthcare.
The changes have caused severe staffing shortages, true emergencies being treated in triage/waiting rooms, significantly increased wait times, patients being held in the ER for days to weeks, increased transports (often not covered by insurance), over-billing, and lawsuits from the health system against patients for bills, among other negative effects.
The region is rural, and has a poverty rate of 20-30%.
The people here are suffering. Doctors and nurses are leaving. And those that cannot leave are scared to speak out for fear of retaliation from Ballad Health.
Those fears are well founded, as several employees have already been admonished, warned, and even fired for doing so.
If we are going to save our healthcare system, the time to act is now, before the assets are combined on July 31st, 2019, which is why 10 residents have signed onto a federal lawsuit requesting Declaratory and Injunctive Relief.
HOW WE GOT HERE
The original COPA legislation – The Hospital Cooperation Act of 1993 – allowed health systems that were in financial trouble to work together in order to reduce costs, remain profitable, and still provide quality healthcare.
It did not, however, allow those health care systems to merge.
In 2014, Wellmont Health System announced it was looking for a strategic partner to help keep their hospitals operating, and reduce their $411 Million debt. The concern with this prospect was that Mountain States, with their own $892 Million debt, would be forced to do the same.
Shortly thereafter, prominent local businessman and BancTenn Chair, Bill Greene, was in the hospital for cellulitis in his leg. According to several interviews Greene gave in the press, it was this hospital stay that set off a chain of events that would change healthcare in our region.
It started with Greene’s cardiologist stopping by to check on him during the stay. Green asked the cardiologist to take a look at his chart, but he explained he could not do so because he was a Wellmont physician, and Greene was in a Mountain States Health Alliance hospital.
On a subsequent golfing trip Greene expressed his dissatisfaction that the two systems could not access each other’s information, especially given their proximity to each other (although this is common with all competing hospitals).
Greene asked Alan Levine, the new CEO of Mountain States, what the options were to rectify the situation. Levine explained that the two health care systems would not be allowed to merge by the FTC because they would be creating a medical monopoly, and that the FTC has a 70% success rate in blocking such acquisitions/mergers. He explained they would have a hard battle on their hands and would require the aid of a law firm similar to Whitcomb, Selinsky, PC (https://www.whitcomblawpc.com/) that specializes in government contracts and business mergers and acquisitions.
Levine then shared the idea of a COPA – a so-far unused state mechanism that put price and competitive controls in place, and shielded health system mergers from FTC scrutiny.
Per Greene, he and a group of self-proclaimed “Hole-in-the-
Over the course of the next few months the “Hole in the Wall Gang” began to hold public forums, created a website, and leveraged the local media to convince the public of two things:
1. Their hospitals were failing financially and were in such terrible shape that they were about to be sold to an outside healthcare system who would have no knowledge of or interest in the local region, and would dismantle, reduce, and close hospitals.2. That the merger of Wellmont Health System and Mountain States Health Alliance was their only chance of survival.
In addition to spreading their message to the public, the Hole in the Wall Gang needed to change the existing COPA Law, since it did not allow for the hospitals to merge. To accomplish that mission and get around the FTC’s 70% success rate blocking such mergers for antitrust reasons, The Gang would need to get new legislation introduced and passed.
Fortunately for them, one Gang member – Mountain States Health Alliance – had the Chair of the Tennessee Senate Health Committee on the payroll: Senator Rusty Crowe (R-Washington & Carter Counties).
Crowe had been a contracted employee for Mountain States for several years, and was the perfect vehicle through which these new pieces of legislation could be passed. On April 8, 2015 Senator Crowe introduced SB0994 to the Health and Welfare Committee.
Senator Richard Briggs (R-Knox County) abstained from voting due to a conflict as he also works for a healthcare system in nearby Knoxville TN.
Senator Doug Overbey (current U.S. Attorney for the Eastern District of TN) abstained, stating:
“What is being proposed is an attempt to provide some insulation from anti-trust scrutiny under traditional anti-trust principles under both federal and state law and in fact, I think that’s what it says what it’s trying to do in Section 2.8.”
Senator Rusty Crowe – again, a paid hospital employee/vendor of Ballad Health – declared Rule 13, which states that he has a personal interest in this law being passed but that he promises his vote is in the best interest of the people.
As laws were being drafted, sponsored and passed by the politicians, the healthcare system administrators and Hole in the Wall Gang members were busy getting letters of support together from local businesses and organizations.
On June 2015, Commissioner of Health John Dreyzehner sent a letter to FTC Staff asking for an opinion. His question: If the New Health System that results from the merger under the COPA was subsequently sold to a non-COPA healthcare system outside of the region, would that trigger an antitrust review?
Better question: Why was he asking that?
At the time, Wellmont and MSHA had not filed a letter of intent to apply for the COPA or submitted the application. So why was the TN Commissioner of Health asking a question that appeared to only be of informational benefit to two private healthcare systems?
After 6 months, and subsequent phone conversations with the TN Dept. of Health, the FTC finally responded to this request for opinion, saying that typically once a merger is allowed to happen, and the assets have been combined, it is extremely difficult to undo.
They said it’s like trying to unscramble an egg.
A few weeks later, Mountain States Health Alliance and Wellmont Health System submitted their application for a COPA.
Over the next two years, there were public hearings held in the local community, but with the local news media only being fed information from the two health systems and the Hole in the Wall Gang, the public was unaware of just what’s at stake, and hardly participated.
The local and state politicians, businessmen, and education leaders did attend those hearings, and advocated for the merger to be approved and COPA granted.
(*Important to note the participants in these public hearings because of their positions, the companies they own, and roles in the community – See “Cast of Characters” below… Also important to note the expert testimonies of FTC Staff and Bob Leibenluft, a DC antitrust attorney, formerly of the FTC Healthcare Antitrust Division)
(**It’s also interesting to note the investment Bill Greene seemed to have in this outcome. He’s a banker. Why the interest in healthcare?)
During the course of the public hearings, several independent investigations and subsequent reports were conducted, 2 of which are of particular importance, as they were financed by the FTC and by the Commonwealth of Virginia.
(Spoiler Alert: They both said “DO NOT DO THIS” – a merger is not necessary to accomplish the efficiencies and commitments promised, and no detailed plan has been provided to prove through clear and convincing evidence that this will be an advantage to the public.)
Independent Report by Robert Town (Commonwealth of VA Hired Expert): Here
Independent Report by Kenneth Kizer (FTC Hired Expert): Here
While there is a lot of information and additional players to be mentioned in this section, including people who worked with Alan Levine at his past companies coming to work with him, one of which was fined $260 Million for fraud, a CEO coming out of retirement, and more questionable political connections, let’s keep moving…
Fast-forward to January 31st, 2018, when the COPA is issued.
Even though the State of TN and Commonwealth of Virginia knew this day was coming, and the laws passed required oversight for the granting of the COPA, no COPA Oversight had been set up at that time.
In fact, it was approximately 4 months before the external COPA Oversight Monitor, Larry Fitzgerald was hired.
During that 4 month unsupervised period, the new health system – Ballad Health – made a move to refinance their debt through hospital municipal bonds. Keep in mind, between the two health systems they had approximately $1.3 Billion in debt.
As a combined system, their overall value was $3 Billion. The current rating on their bonds was a BBB+, so they shopped around to get the bonds refinanced, with the goal of getting a better bond rating to reduce their debt.
They located the Greeneville TN Health and Education Facilities Board, a board whose members had just been in trouble for not bothering to meet for 2 years, and had a better rating than Ballad’s bonds.
Keep in mind, Ballad Health is a nonprofit organization, and therefore a bond that refinances their debt is not allowed… unless you know a couple of politicians – in this case former TN Lieutenant Governor Ron Ramsey, who called U.S. Representative Diane Black, who chaired the House Budget Committee and could rewrite the wording that allows the refinancing to take place.
Still crunching the numbers… but over $100 Million of them were traded between May 10th– May 15th, and the bonds weren’t delivered until 6/6, so the question is: Who had the bonds before the rating was improved, and who bought and sold the bonds?
The CFO of Ballad Health, Lynn Krutak – who helped CEO Alan Levine get the bond to refinance the debt – is also on the Healthcare Advisory Board for PNC Bank.
PNC Capital Investments is one of the three underwriters for the bonds, along with B of A, Merrill Lynch, and US BancCorp.
Bond Series A: Click Here
Bond Series B: Click Here
Ballad Health states in the SEC paperwork that they do not have the money to repay this debt or meet the COPA commitments, and that these funds (during their Forward-Looking Statements) would be derived from merger synergies and consolidations/deletions of services.
In this paperwork they outline certain changes that were not announced to the public or TN Health Department until 6 months after they had already begun implementation.
These changes, specifically the downgrading of the Level III NICU at Holston Valley Medical Center (FULL DISCLOSURE: where my granddaughter was born in 2017 weighing 1 pound 3 ounces), are what prompted my interest, subsequent research, and activism against Ballad Health, the TN Health Department, and VA & TN politicians.
(Yes, there is a lot that happens in Virginia as well… it’s just too much to go into here.)
You may be wondering why people weren’t upset and outraged by all of these things prior to November 2018… Well, it’s pretty simple: Within days of the COPA being issued, Senator Rusty Crowe introduced SB2048 (the revised version of HB2020 first introduced by Rep. Gary Hicks) which is a law protecting the information from the public:
SECTION 1. Tennessee Code Annotated, Title 68, Chapter 11, Part 13, is amended by adding the following as a new section: 68-11-1310.
(a) The following records received by the department or the attorney general and reporter from the recipients or applicants of a certificate of public advantage for a cooperative agreement issued pursuant to this part shall not be subject to disclosure pursuant to title 10, chapter 7, part 5:
(1) Operating and capital budgets;
(2) Existing and future business plans other than any plans, and any modifications to those plans, that are required to be submitted to the state pursuant to a certificate of public advantage or application for a certificate of public advantage;
(3) Financial audit working papers as defined in § 4-3-304(7);
(4) Contracts or agreements with payors and payorpricing information;
(5) Physician recruitment plans and contracts or agreements with physicians;
(6) Contracts or agreements with vendors;
(7) Complaints, including hotline complaints and open investigations of such complaints; and Senate Health and Welfare Committee 1 Amendment No. 1 to SB2048 Crowe Signature of Sponsor AMEND Senate Bill No. 2048 House Bill No. 2020* SA0731 014499 -2-
(8) Employee personnel files, including performance evaluations, disciplinary actions, individual compensation amounts, and employment contract terms not otherwise publicly available.
In addition to these items being protected by this piece of legislation, it also stipulates that if you request this information, are denied, and then sue to obtain it, you – the citizen – are required to pay the attorney’s fees for the healthcare system/TN Dept. of Health.
So to recap: They created a medical monopoly, gave it anti-trust immunity on a state and federal level, protected non-proprietary information including complaints and changes to services, and on top of all of that they have placed the financial burden of seeking this information directly on the citizens for whom this COPA is supposed to be an advantage.
REVIEW
There are 1.2 Million people in rural Northeast Tennessee, Southwest Virginia, Northwest North Carolina, and Southeast Kentucky who are at the mercy of a medical monopoly that exists ONLY because a healthcare corporation, run by a CEO with an employment history that includes two companies that received judgments of $1.7 Billion and $260 Million in healthcare fraud, a group of local and state politicians, and a “Hole-in-the-Wall Gang” of city business, education, and community leaders banded together to change state law that allowed them to merge and granted them IMMUNITY from federal and state antitrust laws.
This unprecedented use of state law borders on unconstitutional given the protections of the Sherman Antitrust Act. And if not quite unconstitutional, certainly unconscionable, unethical, and immoral considering the impact on an already impoverished, under-served community.
We do not have a healthcare crisis in this country, we have a corruption crisis in this country, and corporations, politicians, and governmental policies and practices create, perpetuate, and celebrate its existence.
That is why we need you. No one is watching them. No one is hearing us.
And despite Ballad Health’s motto “It’s Your Story, We’re Listening.”
Our cries are falling on deaf ears.
Please help.
CAST OF CHARACTERS
Alan Levine, CEO Ballad Health, HMA (Health Management Associates) 2010-2013 – President & CEO of the Florida Group of Hospitals – DOJ $260M Fraud Judgment for 2008-2012 false claims.
2017 Broward Health Whistleblower Case Referencing Alan Levine Kickbacks 2006
Columbia/HCA Fraud Judgment (Where Alan Levine first works with/becomes friends with Rick Scott)
Alan Levine is a member of the Federalist Society (his page as a “Contributor”) and is extremely active in political campaign contributions
Bill Greene – Chairman, banquet
Articles for Reference:
http://bjournal.com/effort-to-
https://www.johnsoncitypress.
https://www.johnsoncitypress.
https://www.juniorachievement.
Scott Niswonger – President Niswonger Foundation (Money Influence)
Brian Noland – President, East TN State University & Member of Ballad Board of Directors
David Golden – SVP Safety & Sustainability, Eastman Chemical Company
Tony Keck – Worked with Alan Levine in Louisiana & SVP at Ballad Health
Andy Hall – Ballad Health Gov’t Relations
Eric Deaton – Ballad Health Marketing
Bart Hove – Wellmont CEO – came out of retirement to help make the COPA happen. Was supposed to stay on as 2nd in command at Ballad Health but left the day the COPA was issued.
Melody Trimble – Worked with Alan Levine at HMA and came to work with him at MSHA – also left the day the COPA was issued.
Identified Hole-in-the-Wall Gang Members (10 of 15): Bill Green, Brian Noland, David Golden, Scott Niswonger, Alan Levine, Dennis Phillips, Keith Wilson, Roy Harmon, Jerry Miller, John Tickle, Dr. Bill Hazel (Secretary of Health & Human Resource for the Commonwealth of Virginia met with the Hole in the Wall Gang Sept. 2014.
Politicians —
Tennessee: Senator Rusty Crowe, Senator Mark Norris, Speaker Ron Ramsey, Representative Gary Hicks, Senator Diane Black, Representative Bud Hulsey, Senator Jon Lundberg, Representative David Hawk – Also on COPA Advisory Council
Virginia: Terry Kilgore
