CAMBRIDGE, N.Y.-McClellan Health System closed 15-bed Mary McClellan Hospital on May 5, the only hospital serving rural upstate Washington County. The community could no longer continue to support the operation, hospital officials previously said in a written statement. Meanwhile, 410-bed Glen Falls (N.Y.) Hospital has taken over management of four primary clinics owned by the system and is expected to assume ownership in the next 30 days upon approval of a certificate of need, said Robert Kenny, a spokesman for the state Department of Health. McClellan also filed a closure plan for its 40-bed nursing home that was approved by state health officials earlier this month. Officials had blamed the decision to close the hospital on an aging facility, reduced patient volumes, deteriorating finances and "other serious operational difficulties." The hospital lost $995,000 on $14.6 million in revenue in 2001, according to GuideStar, an online database with financial information for not-for-profit organizations.
YORK, Maine-York Hospital and Wentworth-Douglass Hospital, Dover, N.H., filed a lawsuit earlier this month challenging a Maine Department of Human Services decision allowing competitors to build a cancer treatment center in the southern part of the state. The lawsuit, filed in Kennebec County Superior Court, Augusta, requests a review of the department's decision giving 557-bed Maine Medical Center, Portland, and 116-bed Southern Maine Medical Center, Biddeford, permission to build the new center in York County. York Hospital and Wentworth-Douglass also competed for a certificate of need for a cancer center. A York spokesman said the health department's selection process was "legally questionable and very biased" and that York and Wentworth-Douglass were "held to different standards" than the other hospitals. At deadline, health department officials could not be reached for comment. A spokesman for Maine Medical said the legal challenge would unnecessarily delay bringing an important service to area residents. "We are proceeding until we have a reason not to," the spokesman said.
PASSAIC, N.J.-Atlantic Health System, Florham Park, N.J., signed a letter of intent earlier this month to sell 246-bed General Hospital Center at Passaic to 210-bed Passaic Beth Israel Hospital for $35 million. Eventually, Beth Israel hopes to merge the two facilities at the General Hospital site and sell its vacated nine-acre Beth Israel property to a state agency for school construction, officials said. The agreement is expected to close by year-end. Beth Israel will manage General Hospital before assuming ownership. Atlantic had been exploring options for the hospital for a year and unsuccessfully tried to purchase another hospital in the market. Atlantic officials would not disclose financial information for General Hospital but said all Passaic hospitals have been losing money. The four-hospital system acquired General in 1997.
BURLINGTON, Vt.-Fletcher Allen Health Care last week announced a four-point plan to bring its net operating income to $4 million by the end of its fiscal year on Sept. 30. Through two quarters of this year, the beleaguered hospital lost $8 million. As part of its plan, 50 positions are being eliminated and 78 open positions will remain unfilled. Nine other individuals will have their hours reduced. Additionally, all 400 of the hospital's employed physicians will take pay cuts and reductions in professional expenses such as travel. About 80 members of Fletcher Allen's management will take pay cuts of 3% to 15% through the next fiscal year. The hospital also will increase its scrutiny of group purchasing agreements. Amid a scandal over failure to comply with state certificate-of-need requirements, the 510-bed hospital's chief executive officer, chief operating officer, senior vice president of business development and half of its board resigned recently. Among other troubles, the cost of the hospital's controversial $356 million expansion project exceeded what the state had approved by $146 million and executives were accused of withholding information from regulators.
ABINGTON, Pa.-Abington Memorial Hospital was accused in a civil False Claims Act lawsuit of remaining "deliberately ignorant" of improper laboratory billing, even after having to return $275,000 to the state Medicaid program. In a complaint filed in U.S. District Court in Philadelphia last month, U.S. Attorney Patrick Meehan alleged that the 452-bed hospital did not check whether it improperly billed Medicare and other payers for laboratory claims after being notified by the state in 1994 that its Medicaid billing was inaccurate. As a result, the hospital collected more than $1 million from improper laboratory bills through 2000, Meehan charged. Abington President and Chief Executive Officer Richard Jones denied any intent to defraud but acknowledged "inadvertent payments were made," which the hospital offered to refund to Medicare. In 2000, Meehan's office notified the hospital that its outpatient clinical laboratory program was being investigated. According to allegations in the complaint, the hospital then "failed to maintain and/or intentionally destroyed and/or disposed of physician orders, billing and other records." Jones said the hospital would be "defending itself vigorously in the lawsuit the hospital feels has been unjustly brought." Under the False Claims Act, the hospital could be liable for up to $70 million in damages.