Healthcare Business News

Capella leaves Alabama's 'tough reimbursement climate'

By Beth Kutscher
Posted: December 20, 2012 - 7:45 pm ET

Capella Healthcare, Franklin, Tenn., has sold its remaining facility in Alabama, citing a “tough reimbursement climate” that makes the state one of the most challenging in which to operate.

The investor-owned chain said in a news release that it signed an agreement to sell its 69-bed Jacksonville (Ala.) Medical Center to 276-bed Northeast Alabama Regional Medical Center, Anniston.

Financial terms were not disclosed. The deal is expected to close Dec. 31, pending regulatory approval.

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It was almost exactly a year ago when Capella, which has 15 acute-care and specialty hospitals in seven states, first started its exit from its Southern neighbor. Last December, the system finalized a deal to sell 120-bed Parkway Medical Center, Decatur, Ala., to Huntsville (Ala.) Hospital for $17.5 million.

A few weeks later, Capella announced that its 76-bed Hartselle (Ala.) Medical Center would be shutting its doors.

Capella CEO Dan Slipkovich noted in the release that having a local partner makes the most sense for Jacksonville, adding that healthcare reform has rewarded “close collaboration and increased scale.”

The release also pointed out that Alabama has the lowest Medicare wage index in the country and receives the lowest Medicare reimbursement per hospital, citing the Alabama Hospital Association.

It added that the only way providers can thrive in the state is by having considerable size.

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