Becker's Hospital Review

14 CFO / FINANCE Georgia hospital allegedly involved in lab billing scheme closes By Ayla Ellison C hestatee Regional Hospital in Dahlonega, Ga., closed July 26, making it the seventh rural hospital in Georgia to close since 2010. Here are six things to know about the hospital closure: 1. A CBS News investigation earlier in 2018 includ- ed allegations that the hospital's owner was using the hospital to reap huge paydays from insurers. 2. In 2016, Sunrise, Fla.-based Durall Capital Hold- ings purchased Chestatee Regional from Atlan- ta-based SunLink Health Systems for $15 million. Aaron Durall, who owns a laboratory testing com- pany in Florida, leads DCH. 3. Aer the sale, Mr. Durall allegedly moved part of Chestatee Regional's billing operation to Florida. Soon thereaer, the hospital allegedly began receiv- ing big checks from health insurance companies — some up to $500,000. e money was for toxi- cology tests on urine samples collected from across the country, according to CBS. Some of the testing was allegedly done at Mr. Durall's lab in Florida, but everything was billed through Chestatee Regional Hospital, according to CBS. 4. Insurance companies reimburse some rural hos- pitals at higher rates to help keep healthcare in rural communities. Mr. Durall reportedly capitalized on this by buying Chestatee Regional and a few oth- er rural hospitals. A spokesperson for Mr. Durall told Becker's the claims made in the CBS News re- port will be "vigorously defended in court." 5. On March 30, Gainesville-based Northeast Geor- gia Health System announced it had reached a con- ditional agreement to buy Chestatee Regional Hos- pital. NGHS offiically acquired the property July 31. 6. NGHS resold the hospital property to Atlan- ta-based University System of Georgia's Board of Regents. NGHS will lease the property from the university system as it explores ways to re-estab- lish healthcare services in Dahlonega. n CMS terminates Idaho hospital's Medicare contract By Ayla Ellison C MS ended its provider agreement with Blackfoot-based Idaho Doc- tors' Hospital July 20. Under rules enacted last September, a healthcare facility must average at least two inpatients per day and an at least two-night average length of stay to be considered an inpatient hospital for Medicare reimbursement. In April, CMS determined Doctors' Hospital is not primarily engaged in providing care to inpatients and does not meet the new federal require- ments for Medicare participation. The agency subsequently sent Doc- tors' Hospital a Medicare termination notice. "To go from being OK just 18 months ago, when we had our last survey, to now being told that we don't meet the CMS conditions of participa- tion because of new interpretations of the regulations is just difficult to comprehend," Dave Lowry, administrative manager at Idaho Doctors' Hospital, told KIFI earlier in July. "Like any business that is regulated by government agencies, we fully expect there to be changes to rules and their interpretations, but this drastic level of change just goes to show how much uncertainty there is in healthcare right now." After receiving the termination notice from CMS, Doctors' Hospital sent letters to all patients affected by the contract termination, a spokesper- son told Becker's Hospital Review. "We have worked with other area hospitals who provide the same ser- vices, and our staff provides this information for any patients who call with questions on where to go for care," the Doctors' Hospital spokes- person said. n California hospital will scale back services to cut costs By Ayla Ellison S onoma (Calif.) Valley Hospital, a 75-bed hospital that is part of the Sonoma Valley Hospital District, will close its obstetrics department as a cost-cutting move, according to the North Bay Business Journal. On July 25, the hospital's board voted 4-1 to close the obstetrics depart- ment Oct. 31. The vote came after Sonoma Valley Hospital CEO Kelly Mather said hospital leadership recommended the facility end obstetrics and skilled nursing services and transfer home healthcare services to an- other local nonprofit. Sonoma Valley Hospital recorded a $3 million net loss on revenue of $59 million in fiscal year 2018, according to released unaudited numbers. A decline in births at the hospital contributed to the hospital's loss. The number of births at Sonoma Valley Hospital dropped from 218 in fiscal 2010 to 111 in fiscal 2018, according to the report. The board was initially slated to consider closing the hospital's skilled nursing department at the July 25 meeting, but the vote was postponed to give hospital leadership more time to get input from staff, physicians and residents. n

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