Virginia Gay Hospital in Vinton announced it will join UnityPoint Health-Cedar Rapids system as an affiliate, ending its previous agreement with the University of Iowa.
Officials announced Monday that “after many months of careful evaluation,” the 25-bed Vinton hospital has ended its affiliation with the UI Hospitals and Clinics and partnered with the Cedar Rapids health system effective May 1, according to a news release.
“This new affiliation agreement with UnityPoint Health-Cedar Rapids allows us to be better prepared to meet the challenges of the future and will strengthen our position as a community hospital,” said Mike Riege, Virginia Gay Hospital administrator, in a statement.
Critical access hospitals, a designation give to rural hospitals by the Centers for Medicare and Medicaid Services, are required by law to maintain an affiliation with a larger health system with greater expertise and medical specialists.
Virginia Gay had been affiliated with the Iowa City-based health system for 16 years, Riege said in an interview with The Gazette. He described the split with the university as one encouraged by “philosophical differences.”
“We feel that with our mission as a rural hospital, UnityPoint Health will help us fulfill that mission,” Riege said. “The University of Iowa has always been a good partner, but we think UnityPoint has more to offer us as a rural hospital.”
Riege said the Cedar Rapids and Vinton organizations both emphasize a focus on population health, a concept that encourages wellness and practices to improve patient outcomes and keep them out of the hospital. It differs from a fee-for-service model, which reimburses providers each time a patient visits a doctor’s office or emergency department.
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The agreement between Virginia Gay and UnityPoint Health-Cedar Rapids does not involve any sale or exchange of assets “and will allow both organizations to maintain local governance through a local board of directors,” according to the news release.
Patients still will have first choice of hospital when being referred onto a higher level of care, Riege said.
“We are excited to welcome Virginia Gay Hospital into the UnityPoint Health-Cedar Rapids family,” said Michelle Niermann, UnityPoint Health-Cedar Rapids president and chief executive officer, in a statement.
The Cedar Rapids hospital is an affiliate of UnityPoint Health, the Des Moines-based health system.
NO EFFECT ON MEDICAID LAWSUIT
This past year, Virginia Gay officials filed a lawsuit against the three managed-care organizations that provided health care coverage for Iowans on Medicaid, saying the private insurance companies had violated federal law by “illegally recouping patient revenue” from the emergency department.
The suit was filed against UnitedHealthcare of the River Valley and Amerigroup Iowa, current Medicaid insurers in Iowa, and AmeriHealth Caritas, which left the state’s privatized program in 2017.
Riege said in a previous interview with The Gazette the unpaid claims from all three insurers resulted in a $91,000 loss for the facility between 2016 and 2017.
UnityPoint Health-Cedar Rapids spokeswoman Sarah Corizzo said Monday that Virginia Gay’s lawsuit will proceed, and the affiliation announcement has no affect on pending litigations.
According to the lawsuit, the managed-care organizations were using an outdated medical classification list from the International Statistical Classification of Diseases and Related Health Problems, or ICDs. Health care providers use the list to classify and code diagnoses, symptoms and procedures to insurance companies for reimbursement.
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The suit states Iowa’s managed-care organizations were “not using a complete and accurate list” of the ICD codes from Oct. 1, 2015, to about June 15, 2017.
The lawsuit further says that beginning in March 2017, the managed-care organizations started recouping a portion of reimbursements for patient services, claiming there had been overpayments.
“They were recouping or taking back money from us that should have been legally ours because they should have been abiding by ICD-10,” Riege said to The Gazette in October.
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