National Medical Enterprises has received several bids for its 61 psychiatric hospitals, with prospective buyers including Charter Medical Corp. and Universal Health Services, sources close to the situation reported.
The Santa Monica, Calif.-based chain put its psychiatric hospitals on the selling block in January, taking a $287 million charge in connection with the write-off (Jan. 17, p. 8). The psychiatric division has been plagued by allegations that hospitals submitted fraudulent bills and virtually kidnapped some patients in efforts to boost revenues.
Christi Sulz bach, NME's se nior vice presi dent for public af fairs, declined to comment on the number of bidders or their names. However, she acknowledged that the company had received "several bids."
Sources said Macon, Ga.-based Charter Medical, the nation's largest psychiatric hospital chain with 75 facilities, is among the bidders.
When asked about a bid by the company, Charter's chairman, E. Mac Crawford, declined to comment. Executives at King of Prussia, Pa.-based Universal did not return calls.
NME hopes to sell the 61 hospitals as a group, Ms. Sulzbach said. However, she said it's too early to say whether that's possible. An agreement may be announced later this month, she said.
Ms. Sulzbach also said a decision hadn't been made about NME's management services division, which operates psychiatric and rehabilitation units within acute-care hospitals. According to MODERN HEALTHCARE's 1993 survey of contract management firms, NME managed units for 57 hospitals in 1992.
In a related development, John P. Docherty, M.D., NME's senior vice president in the psychiatric division, has left the company to become a professor of psychiatry at the University of California-Los Angeles.
Charter, one of the reported bidders for NME's facilities, last week reported a drop in revenues and in its net loss for its first quarter ended Dec. 31. The company reported a net loss of $3.9 million, or 15 cents per share, compared with a net loss of $7.2 million, or 29 cents per share, in the year-ago period. Revenues dropped 8% to $208.8 million.
Both a drop in patient days and revenue per patient day contributed to the drop in overall revenues, Mr. Crawford said. Patient days dropped 5% to 320,644 during the quarter. However, outpatient revenues grew 33% to $29.1 million.