South Nassau To Purchase Hospital
Long Beach Medical Center, the bankrupt and Hurricane Sandy-battered hospital on Long Island’s south shore, was sold to South Nassau Communities Hospital of Oceanside on February 12, 2014. The hospital was near bankruptcy before it shuttered it doors in preparation of the October 2012 storm, but did not reopen after Sandy destroyed its electric, communications, fire and food service systems.
South Nassau Communities Hospital purchased Long Beach Medical Center for $12 million, and plans to renovate the hospital in order to create a 24-hour emergency department and walk-in clinic.
The City of Long Beach, owed $600,000 in utilities and other fees by the bankrupt hospital, strongly supported the sale. “It is crucial that we have hospital care in the city of Long Beach, especially with the summer months approaching,” city Corporation Counsel Corey Klein told bankruptcy Judge Alan S. Trust.
A Critical Mix of Budget Cuts and Storm Damage
Long Beach Medical Center’s problems began as a result of cuts to national and state medical reimbursement rates. In an attempt to combat rising rates, the hospital upgraded its technology and quality of physicians before Hurricane Sandy destroyed much of the hospital’s critical services. The final blow came when the U.S. Centers for Medicare and Medicaid terminated their provider-agreement with the hospital because it was shut down for more than a year.
According to court documents, Long Beach had accrued $48 million in debt and was unable to recover after Hurricane Sandy’s damage. “The storm further exacerbated an already precarious financial situation and left the debtors in a situation from which they have not been able to recover,” Douglas Melzer, the hospital’s chief executive officer, said in a court filing. Long Beach Medical was able to resume operations at its 120-bed nursing home, family health clinic, and behavioral health clinic.
The Wall Street Journal reported that funding for the purchase came from a grant that the State of New York provided to build an urgent-care facility on the hospital grounds. The Journal reported that an additional $6 million would be granted to South Nassau Communities by the Dormitory Authority of the State of New York. Long Beach Medical received $1.5 million of the funding before the bankruptcy filing and requesting $4.5 million in the form of bankruptcy financing.
The agreement with South Nassau Communities includes all of Long Beach Medical’s real estate and operating assets. In addition to its urgent-care center, South Nassau Communities plans to solicit FEMA funding to repair the storm’s destruction to the hospital. The sale is expected to close by the end of May, 2014.
Long Beach Hospital is a 162-bed teaching and community hospital built in 1922. It is affiliated with the New York College of Osteopathic Medicine and the New York College of Podiatric Medicine. Orthopedic care is provided in collaboration with the Hospital for Joint Disease of NYU Langone Medical Center.