Issue link: https://beckershealthcare.uberflip.com/i/821337
25 CFO / FINANCE Bankrupt Arizona Hospital Discloses Debts Owed to 34 'Critical Vendors' By Ayla Ellison G reen Valley (Ariz.) Hospital filed for Chapter 11 bankrupt- cy April 3. In its bankruptcy documents the hospital says it was "poorly managed" and "undercapi- talized" since it opened less than two years ago, according to the Green Valley News. The 49-bed for-profit hospital filed for bankruptcy to strengthen its financial performance and restructure its debt. "This is merely a procedural step, and to be sustainable we have to take this step to reorganize our finances and alleviate some of our debt burden," hospital CEO John Matuska told the Arizona Daily Star. The hospital said in its bankruptcy documents that it recruited a team of managers in August that was tasked with reversing the hospital's financial downturn. However, the hospital was pushed into bankruptcy due to its un- sustainable debt load, according to the Green Valley News. In its bankruptcy petition, Green Valley Hospital listed its liabilities as about $95 million. The hospital said it owes a combined $1.07 million to 34 "critical vendors," which provide ser- vices and supplies to the hospital that are necessary for it to operate. Two of the "critical vendors" — Tucson, Ariz.-based Pima Heart and Southern Arizona Gastroenterology in Tucson — have indicated they will stop provid- ing services to Green Valley Hospital if it fails to honor repayment plans made prior to its bankruptcy filing. To maintain those services, hospital management has agreed to repay the $305,000 it owes Pima Heart in three equal payments in April, May and June. The hospital owes Southern Ar- izona Gastroenterology $23,300 and planned to pay off the debt by May 1, according to the report. Green Valley Hospital will operate as normal as it restructures its debt and no layoffs are expected. n Virginia Lawmakers Vote Down Proposed Medicaid Expansion By Kelly Gooch T he Virginia House of Delegates on April 5 rejected expanding the state's Medicaid program un- der the ACA, according to Richmond Times-Dispatch. The vote was 66-34 against Democratic Virginia Gov. Terry McAuliffe's proposed budget amendment for Medicaid expan- sion. But the vote doesn't mean Virginia is through discussing healthcare reform. A new joint legislative subcommittee, which is designed to keep a watch on po- tential healthcare changes at the national level and consider improvements within the state, can discuss healthcare at future meetings, according to the report. "We need to do it in a fiscally responsi- ble way that doesn't bust the budget," Steven Landes, a Republican delegate, said before the April 5 vote, according to the report. n Fitch: Political Uncertainty Doesn't Change Long-Term Outlook for Healthcare By Kelly Gooch F itch Ratings maintains a stable outlook and sector rating for healthcare, even as the current political climate generates uncertainty, it said in an April report. e agency initially published its 2017 outlook for the industry last December, shortly aer the 2016 presidential election. Since then, the agency said healthcare companies have pri- marily received rating affirmations, and it be- lieves the medium- to long-term fundamental outlook for healthcare is currently in effect. Fitch analysts added the drivers of healthcare trends have not significantly changed. "As the industry struggles to meet the cost burden of increasing healthcare demand, the long-term solution will require finding a balance between an individual's access to healthcare and its affordability," Megan Neu- burger, managing director of U.S. Corporates at Fitch, said in a news release. "Without any concrete solutions currently on the table, near-term uncertainty may force providers to rethink aspects of their business, but this is unlikely to overhaul the industry's broader dynamics." Fitch cited a number of issues it believes are current risks to healthcare, including repeal and replacement of the ACA, drug pricing, the shi from fee-for-service to value-based care and healthcare consumerism. The GOP's ACA replacement plan was pulled from the House floor in March. However, Fitch said HHS could still poten- tially cut funding for federal cost-sharing subsidies that help individuals purchase in- surance coverage. Additionally, Fitch said federal lawmakers have introduced legislation with the goal of lowering drug prices. "Policy objectives are aimed at addressing both drug manufactur- ers taking advantage of supply dislocations to increase prices on established products and hey price tags for new, truly innovative ther- apies," the agency said. As far as the shi to value-based care, the agency believes "both political parties are phil- osophically aligned on the benefits of alterna- tive payment models like the Medicare Com- prehensive Joint Replacement bundle, so they are likely to continue in some form, although the role government will explicitly play is still up for debate." And regarding healthcare con- sumerism, Fitch noted patients' desire for price transparency will continue as they take on more financial responsibility for their care. n