Becker's Hospital Review

13 CFO / FINANCE Indiana hospital to close, lay off 437 employees By Ayla Ellison F ayette Regional Health System, a sin- gle-hospital system based in Connersville, Ind., is in the process of selling its assets and plans to cease operations by July 31, accord- ing to a Worker Adjustment and Retraining No- tification Act notice filed with the state. e hospital has been operating in Chapter 11 bankruptcy since October 2018, and is trying to sell its assets. Regardless of whether a sale is finalized, Fayette Regional will cease oper- ations at its facilities no later than July 31 and lay off 437 employees. "ese employment terminations are expected to be permanent," states the WARN notice filed by the hospital. Although Fayette Regional hasn't set a spe- cific date to wind down operations, workers affected by the shutdown remained employed by the hospital until July 3, according to the WARN notice. Some Fayette Regional employees will likely secure jobs with Richmond, Ind.-based Reid Health, which entered into an agreement to acquire "a substantial portion" of Fayette Re- gional's assets. Reid Health currently provides a variety of healthcare services in Connersville, includ- ing primary, specialty and urgent care, and leaders are evaluating which services would be offered if the asset purchase agreement is approved and finalized. "Reid Health will be working to determine the path forward for the services that will be provided in Connersville," the health system said in an emailed statement. "ese services must be sustainable and available for many years into the future." Although few details are available about the proposed transaction and which services will be offered if the deal closes, Reid Health said it is committed to maintaining local access to high-quality healthcare services and will share information as it becomes available. "Reid Health officials expect to be at Fayette Regional to discuss details of the transition with leadership and others at Fayette Region- al," Reid Health said in the press release. n Private equity-owned hospital chain files for bankruptcy By Ayla Ellison N ew LifeCare Hospitals, a long- term acute care hospital oper- ator based in Plano, Texas, filed for Chapter 11 bankruptcy protection May 6, according to The Wall Street Journal. The company, owned mostly by affil- iates of Blue Mountain Capital, Mon- arch Alternative Capital and Twin Haven Special Opportunities Fund, cited de- clining reimbursement due to Medicare changes as the reason for the bankrupt- cy filing. Prior to entering bankruptcy, New Life- Care, which operates 17 facilities in nine states, closed some hospitals and took other steps to cut costs. New LifeCare is in discussions with po- tential buyers, and CEO James Murray expects the company to be auctioned through the bankruptcy process later this year, according to The Wall Street Journal, which cited bankruptcy court documents. n Washington health system files for bankruptcy, cites issues with revenue cycle vendor By Ayla Ellison A stria Health, a three-hospital health system based in Sunnyside, Wash., filed for Chapter 11 bankruptcy protection on May 6. Astria plans to use the bankruptcy process to restructure its finances, enter into a plan of reorganization with its creditors and replace its billing company, according to TV station KIMA. In a press release issued May 6, the health system said it is facing a signifi- cant shortfall in cash flow due to issues with the company it contracted with to manage its billing in August 2018. Astria said the unidentified company failed to process a significant number of accounts receivable, leading to a backlog of unpaid claims, according to the Yakima Herald-Republic. "Although hospital leadership has actively managed the supply chain to en- sure necessary supplies for patient care, this delay in cash collections has now become severe enough to potentially disrupt the organization's ability to pay for crucial items in a timely matter," Astria Health wrote in its news re- lease, according to the Yakima Herald-Republic. Astria said it has secured debtor in possession financing and the bankruptcy filing will not affect operations at its hospitals or clinics. They will remain open as the health system moves through the bankruptcy process. "As one of the largest healthcare providers and employers in the Yakima Valley, we believe this step was necessary in order to protect the Valley's hospitals and its local economies," Astria Health President CEO John Gallagher told KIMA. "We believe it will protect and sustain the three hospitals for the future." Astria aims to emerge from bankruptcy by the end of 2019. n

• Cover