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$2.00/JANUARY 30 - FEBRUARY 5, 2012
New state Medicaid plan based on quality
Kasich team renews push to collect muni taxes Communities still balk at turning over control By JAY MILLER jmiller@crain.com
After lying low since the fall, the Kasich administration intends to renew its push to streamline municipal income tax filing for businesses across Ohio by bringing the collection of municipal taxes under state control. Presently, 600 communities collect their own taxes, devise their own forms and even define for themselves what income is subject to municipal tax. Putting the collection of those taxes in the state’s hands is part of an effort, led by Lt. Gov. Mary Taylor, to make it easier to do business in Ohio. “Ideally, making Ohio a better place to do business includes makTaylor ing it easier to do business on the local level,” Ms. Taylor said on a visit to Cleveland last Tuesday, Jan. 24. “We have heard (fragmented local tax collection) is an impediment to business growth in Ohio.” According to the Ohio Municipal League, 540 communities in Ohio collect income taxes. Some have joined together in collection agencies to handle their tax collections. The Brecksville-based Regional Income Tax Agency collects taxes for 207 communities; the city of Cleveland’s Central Collection Agency serves 63 taxing districts. Municipalities have reacted strongly to what they see as the state once again usurping home rule, and they’re especially concerned about turning over tax collection to the state. The lieutenant governor said no legislation has been drafted, though she and Ohio tax commissioner Joe Testa have been airing the idea since last summer. “We’d like to have an open discussion of what are our options are,” she said
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See TAX Page 4
Cleveland
Buffalo*
Branches: 121 Branch share: 11% Deposits: $10.93 billion Market share: 21.67%
Branches: 41 Branch share: 13.6% Deposits: $2.50 billion Market share: 9.55%
HEALTHIER KEY KEYS ON ‘GO-TO’ MARKETS As bank’s capital level and economy have improved, its acquisition activity also may rise By MICHELLE PARK mpark@crain.com
T
hough he’s quick to emphasize that acquisitions like the one KeyCorp announced this month are only one lever the bank will use to achieve growth, Bill Koehler, Key’s No. 2 executive, said the banking giant is in a far better position to swing deals now than it has been in recent years. “We are much stronger financially,” Mr. Koehler, president of Key Community Bank and KeyBank N.A., said in an interview last Wednesday, Jan. 25, with
Crain’s. “We should be viewed by a potential seller as an attractive partner, somebody who is going to be a responsible employer of their employees, somebody who will support the community in the way that that organization probably has over time.” Key signaled its interest in possible acquisitions while reporting its fourthquarter earnings last week. In Key’s earnings release, KeyCorp chairman and CEO Beth Mooney commented on KeyBank’s agreement to acquire 37 HSBC Bank branches in Buffalo and See KEY Page 5
Kasich proposal would reward providers with best outcomes By TIMOTHY MAGAW tmagaw@crain.com
Gov. John Kasich’s administration quietly is laying the groundwork for a Medicaid program that pays doctors for providing good care rather than lots of care. A novel approach? Not entirely, but health care observers say the governor’s office appears to be backing up its rhetoric with the state’s checkbook. The state recently announced plans to rebid contracts with its Medicaid managed care providers, which coordinate care for nearly 70% of the people on Ohio’s Medicaid rolls. Under the new contracts, the state expects to pay more money to managed care groups that are able to demonstrate better outcomes for patients. Moreover, the state is working to ANALYSIS transform the criteria by which it reimburses hospitals and physicians. Now, providers are paid differing rates based on a patient’s diagnosis. However, state Medicaid director John McCarthy told Crain’s the state is looking at “quality data and trying to figure out how to incorporate that into the payment methodology.” While still short on details, these initial steps of overhauling the Medicaid program are just the start of significant changes on the way, according to state officials leading the efforts. The push has hospitals, doctors and managed care plans bracing for what the changes could mean for them. “Kasich is putting some money behind this, and isn’t just saying, ‘This is the right thing to do,’” said J.B. Silvers, a health care finance expert and professor of See MEDICAID Page 6
INSIDE Still in the club at Progressive Field Portland
Seattle
Branches: 52 Branch share: 10.1% Deposits: $2.49 billion Market share: 6.15%
Branches: 112 Branch share: 11.4% Deposits: $6.48 billion Market share: 9.23%
* — BUFFALO DATA DO NOT INCLUDE RECENT ACQUISITION OF 37 HSBC BRANCHES; BRANCH/BRANCH SHARE DATA FROM KEYCORP AS OF YEAR-END 2011; DEPOSITS/MARKET SHARE DATA FROM FDIC AS OF JUNE 30, 2011
The Indians have maintained the all-inclusive food feature in Progressive Field’s luxury club seating area. PAGE 7 ALSO INSIDE: ■ A replacement advocacy group for the Flats is in the planning stages. PAGE 6
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SPECIAL SECTION
FINANCE Chief financial officers often are asked to take on human resources duties ■ Page 13 PLUS: WATCHING EUROPE ■ SEC RULE CHANGES ■ & MORE
Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 5