Experts Forecast Trend of State Hospital Closures Under ACA
Experts say that they expect several small- and mid-sized California hospitals to close amid implementation of the Affordable Care Act, the Los Angeles Times reports.
PHC Hospital Closures
Officials with Pacific Health Corporation said they are closing four hospitals in part because of legal costs associated with federal allegations that the facilities recruited homeless patients and provided them withÂ unnecessary health care services in an effort to defraud Medicare and Medi-Cal, California's Medicaid program (Terhune, Los Angeles Times, 4/3).
The U.S. attorney for central California said, "As a result of this illegal conduct, Medicare and [Medi-Cal] made nearly $16 million in improper payments to the PHC hospitals." PHC agreed to pay $16.5 million to settle the allegations (California Healthline, 8/27/12).
On Wednesday, PHC closed the emergency departments of:
- Bellflower Medical Center;
- Los Angeles Metropolitan Medical Center; and
- Newport Specialty Hospital.
Officials said the rest of the hospitals' services will cease after all patients are transferred to other facilities (AP/Sacramento Bee, 4/2).
Last week, PHC announced the closure of Anaheim General Hospital.
Growing Trend of Hospital Closures
According to the Times, although PHC's action stems from the fraud case, experts expect many state hospitals to close over the next decade.
Experts say that insurers increasingly are excluding certain hospitals and forming smaller networks of health care providers to help curb rising health care costs. Small- and mid-sized hospitals do not have the negotiating clout or resources of larger hospitals and health systems to join such networks, the Times reports.
In addition, smaller hospitals are struggling under new ACA-related funding cuts and penalties for patient readmissions.
Jim Lott -- executive vice president of the Hospital Association of Southern California -- said, "There were circumstances unique to [PHC] that precipitated" its hospital closures, adding, "Having said that, we are forecasting for hospital closures because of the changes brought about by the implementation of Obamacare."He said that about 40 hospitals in the state could close over the next five to 10 years, which would represent nearly 10% of hospitals statewide (Los Angeles Times, 4/3). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.