Becker's ASC Review

59 HEALTHCARE NEWS West Virginia hospital to close, lay off 600 employees By Ayla Ellison F airmont (W.Va.) Regional Medical Center notified employees Feb. 18 that it is closing aer attempts to find a buyer failed, according to West Virginia MetroNews. e 207-bed hospital, owned by Irvine, Calif.-based Alecto Healthcare Services, is shutting down aer more than a year of searching for a buyer, according to a memo to employees obtained by West Virginia MetroNews. Fairmont Regional CEO Bob Adcock said officials made the decision to close the hospital aer "all other reasonable options were considered and explored," ac- cording to WDTV. "You are likely aware of the financial difficul- ties we have experienced at the hospital," the letter to employees states, according to WDTV. "Our plans to reorganize some administrative functions and develop other revenue sources were insufficient to stop the financial losses at FRMC. Our efforts to find a buyer or new source of financing were unsuccessful." When Fairmont Regional Medical Center closes, about 600 employees will lose their jobs. Hospital officials told employees Feb. 18 that they will soon receive a Worker Adjust- ment and Retraining Notification Act notice, but they may not have jobs for the full 60 days covered by the notice, according to West Virginia MetroNews. e closure announcement comes less than six months aer Alecto closed two other hospitals. In September, the company shut down East Ohio Regional Hospital in Mar- tins Ferry and Ohio Valley Medical Center in Wheeling, W.Va. In a statement issued Feb. 18, Alecto said Fairmont Regional is facing the same chal- lenges as many other hospitals. "Like other hospitals in West Virginia and across the country that are closing, planning to close, or filing for bankruptcy protection, FRMC has faced a number of challenges including difficulties recruiting physicians, vigorous competition from larger health sys- tems for patients and physicians, declining patient volumes, the inability to qualify as a critical access hospital or sole community hospital (and the increased reimbursement from Medicare that comes along with such designations) due to its geographic location and the geographic location of other hospi- tals, decreasing reimbursement from all pay- ors, increasing operating costs, and a physi- cal plant that has required improvements as it has aged," reads the statement from Alecto, acording to Times West Virginian. n Bankrupt California health system lays off 920 employees By Ayla Ellison M ore than 900 workers lost their jobs when Verity Health, a nonprofit system based in El Segundo, Calif., closed one of its hospitals. In August 2018, Verity and 16 of its affiliates entered Chapter 11 bankruptcy. About five months later, the health system agreed to sell four hospitals, including St. Vincent Medical Center in Los Angeles, to KPC Group's Strategic Global Management. However, the deal fell through and Verity shut down 366-bed St. Vincent in late January. In documents filed with the California Employment De- velopment Department, Verity cited SGM's failure to meet the court-appointed closing deadline as the reason for closing St. Vincent. "Given SGM's failure to close the sale transaction, and there being no feasible alternative for continued opera- tions, the debtors made the difficult decision to close St. Vincent," reads the Worker Adjustment and Retraining Notification Act report filed by Verity. Verity said 920 employees were laid off as a result of the closure. The employees were laid off between Jan. 14 and Jan. 27, according to the WARN report. The closure of St. Vincent does not affect Verity's other three hospi- tals in California: St. Francis Medical Center in Lynwood, Seton Medical Center in Daly City, and Seton Coastside in Moss Beach. In a Jan. 8 release, SGM disputed Verity's claims regard- ing the closure of St. Vincent. "Verity falsely ascribes its decision to an alleged default by Strategic Global Management … on its contract to purchase St. Vincent as well as St. Francis Medical Center, Seton Medical Center and Seton Coastside," states the release. SGM claims it raised concerns about Verity's compliance with the purchase agreement last fall, including concerns about safety and health issues at St. Vincent. "SGM remains interested in resolving its differences with Verity and closing the purchase transaction," an SGM spokesperson said in the release. "However, Verity has re- fused to meet with SGM. While SGM is hopeful Verity will reconsider its position, SGM will vigorously defend itself from Verity's claims and at the appropriate time, bring its own claims against Verity for its wrongful conduct." n

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