San Diego-based Scripps Health has entered hospice care as the area's biggest hospice provider continues to scale down its operations under bankruptcy protection.
The not-for-profit San Diego Hospice laid off about a third of its employees after disclosing last year that it was facing significant uncertainty because of an ongoing Medicare audit. On Feb. 4, the company filed for Chapter 11 bankruptcy in San Diego (PDF)
, and CEO Kathleen Pacura issued a statement that day
citing the audit and “severe financial challenges” and noting declining reimbursement rates in government programs.
San Diego Hospice has closed its 23-bed inpatient facility—the only one of its kind in California—pending the outcome of the reorganization.
Scripps Health President and CEO Chris Van Gorder said in an interview that San Diego Hospice leaders encouraged the health system to begin providing hospice care in order to ensure continuity of care for the company's patients and the community.
Van Gorder said Scripps has been San Diego hospice's biggest referral source and has a longstanding clinical and business relationship with the organization.
“We felt no need to replicate something that was working well in this community,” Van Gorder said.
With that changing rapidly, Scripps Health acquired a small company called Horizon Hospice
in order to get a hospice license faster than was possible by applying for one from state regulators. Scripps acquired all of the for-profit company's shares on Feb. 4.
The health system is working with the California Department of Public Health to convert the company to a not-for-profit organization and change the name, Van Gorder said.
San Diego Hospice lost about $535,000 on revenue of $83 million in 2010, according to its most recent tax filing available. The company said in its bankruptcy petition that it owes about $9.8 million to the 20 creditors with the largest unsecured claims.