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Fairview Health plans building boom

Minneapolis-based Fairview Health Services is making construction plans after freeing up cash from the recent sale of its Red Wing Medical Center to the Rochester-based Mayo Clinic. Finance & Commerce reports major construction projects appear to be in the works for Southdale Hospital in Edina and Ridges Hospital in Burnsville.
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Minneapolis-based Fairview Health Services is making construction plans after freeing up cash from the recent sale of its Red Wing Medical Center to the Rochester-based Mayo Clinic. Finance & Commerce reports major construction projects appear to be in the works for Southdale Hospital in Edina and Ridges Hospital in Burnsville.

Mayo Clinic paid $64 million to acquire the hospital and medical group in Red Wing, the Pioneer Press reports. Fairview also freed up about $54 million-worth of bonding proceeds allocated toward the Red Wing hospital and is seeking approval to spend the money elsewhere.

The Minneapolis-based health system is trying to move past an overly aggressive bill-collecting scandal involving its contractor Chicago-based Accretive Health. Fairview's board of directors ousted now former CEO Mark Eustis amid the investigation.

In June, Moody’s Investors Service downgraded Fairview's $836 million in debt. The bond rating agency cited a “significant downturn in financial performance,” as well as “potential reputational risks."

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Rochester-based Mayo Clinic and Minneapolis-based Fairview Health Services have signed a tentative agreement to transfer control of Red Wing Medical Center. Mayo Clinic Health System hopes to assume operations by July 1. The deal follows months of discussion.

Mayo Clinic and Fairview Red Wing continue merger negotiations

The two health care providers began reviewing the potential merger about five months ago. A Fairview Red Wing official told the Republican Eagle that a final decision is expected to be made in the next several months. Lake City and Cannon Falls are already part of the Mayo Clinic Health System.

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Fairview Ridges Hospital in Burnsville plans to add a150,000-square-foot specialty care medical office building, hospital expansion and a new parking ramp, the Business Journal reports. The project will cost about $60 million.

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The health care system felt it was necessary to cut its ties with the debt collector. Minnesota Attorney General Lori Swanson accused Chicago-based Accretive of using high-pressure strategies to get Minnesota hospital patients to pay for their treatments. The Business Journal reports Fairview began reducing its contract with the collection firm after a laptop with unencrypted patient information was stolen. Meanwhile, a Democratic Congressman from California is now calling for a federal investigation.

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An invitation from Hennepin County has Goodhue County commissioners considering the benefits of a merger. The Red Wing Republican Eagle reports extra space — whether for storage, offices or autopsies — was presented as the primary advantage. Goodhue County has also reached out to Mayo Clinic, but it has not yet provided a proposal about offering morgue services.

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The aggressive practices used by the Chicago-based Accrective Health to collect debt from patients could put Fairview's University of Minnesota Medical Center at risk of being terminated from Medicare and Medicaid, according to the Star Tribune. Federal documents obtained by the newspaper show patients and their relatives were subjected to "abuse and harassment'' from debt collectors while waiting for treatment.