Creditors File Against Local Subsidiary
Specialty Hospitals of America, a New Hampshire based nursing home and hospital conglomeration, filed Chapter 11 bankruptcy after a group of creditors filed an involuntary bankruptcy petition against the medical group’s Washington subsidiary.
According to a report by The Washington Business Journal, a judge ruled that Specialty Hospitals of America owed approximately $7.5 million in Medicaid over-payments after submitting improper bills to the government from 2007 to 2010. Specialty operates 142 long-term critical care beds and 180 nursing home beds throughout Washington, D.C.
Silver Point Capital plans to loan Specialty’s D.C. subsidiary, Specialty Hospital of Washington, $15 million to continue operations during the sale of its remaining assets.
“This is an exciting new day, a new beginning for Specialty,” said Lisa Proctor, spokeswoman for Specialty Hospital of Washington. Proctor said that benefits and pay for employees will continue without interruption, and that Specialty does not anticipate layoffs. “It’s all in the hands of the court,” she added.
An Unsuccessful Partnership with the District
In 2007, Specialty Hospitals of America purchased Greater Southeast Community Hospital, a struggling hospital in Washington, D.C. with the support of the D.C. Council and $79 million in city grants and loans. Although Specialty invested millions of dollars into the hospital and renamed it United Medical Center; by 2010, the D.C. Council claimed that Specialty owed back taxes and could no longer pay its employees.
Council leaders launched a series of lawsuits against the hospital, leading to the District taking over UMC. The final blow came in December 2013, when a District judge ruled that Specialty owed about $7.5 million Medicaid over-charges.
Wayne Turnage, the District’s Director of Health Care Finance, said that city leaders are hopeful that Specialty will remain in a position to provide quality care; however, the city has prepared a last-resort plan for patient transfers should the quality of care deteriorate.
Several other hospitals have gone bankrupt in 2014. Click on the articles below to learn more.
Nicholas County Hospital Closes Amidst Bankruptcy (Carlisle, Kentucky)
St. Francis Hospital Closes in Bankruptcy (Poughkeepsie, NY)
Palm Drive Hospital Closes in Bankruptcy (Sonoma County, California)
Natchez Regional Hospital Files Bankruptcy (Southwest Mississippi)
North Adams Hospital Files for Bankruptcy (Western Massachusetts)
Gilbert Hospital Files for Chapter 11 Bankruptcy (Phoenix, Arizona)