DOWNEY, Calif.—The Daughters of Charity Health System has entered exclusive negotiations to purchase a not-for-profit hospital in bankruptcy in Downey that serves southeast Los Angeles County, the two organizations said. Daughters of Charity, a six-hospital Roman Catholic system based in Los Altos Hills, Calif., has received notice that officials for 181-bed Downey Regional Medical Center have approved a letter of intent for affiliation with the system. A news release from Daughters of Charity said Downey Regional filed for Chapter 11 bankruptcy protection last September, and then began to consider affiliations with a number of systems, ultimately resulting in the Feb. 2 decision to negotiate exclusively with Daughters of Charity. Rob Fuller, executive vice president and chief operating officer of Downey Regional, said in a written statement that the affiliation process may last several more months because of the complexity of the transaction and the requirements of the bankruptcy courts.
Regionals: North Hawaii Community Hospital and Quorum call it quits and more news ...
KAMUELA, Hawaii—North Hawaii Community Hospital in Kamuela is ending its management contract with Quorum Health Resources, effective April 1. The Big Island hospital plans to take over management in-house. Quorum Health Resources has managed the 39-bed hospital since 2008, providing a CEO and chief financial officer as well as purchasing, billing and facilities expertise. Prior to that, Adventist Health of Roseville, Calif., managed the hospital since it opened in 1996. A board restructuring in 2008 and direct employment of top executives caused hospital officials to rethink the need for outside management. “Over the past two years, the value of working with a management company diminished,” said North Hawaii CEO John White in a news release. Quorum Health Resources, White added, is “a good company with good people who have helped us and many other hospitals around the country.”
MESA, Ariz.—Banner Heart Hospital has opened a $30 million expansion, adding more space for open-heart and vascular surgery, catheterization procedures and patient recovery. The expansion project added two operating rooms, one catheterization laboratory and one electrophysiology laboratory, and extra space for future use as catheterization laboratories. The expanded wing allows for more space for patient recovery from surgery, and additional outpatient services. The 111-bed facility, owned by not-for-profit, Phoenix-based Banner Health, performs more than 6,000 catheterization procedures and more than 800 open-heart surgeries each year.
WILLITS, Calif.—Adventist Health, a 19-hospital system based in Roseville, Calif., announced that it has signed a letter of intent with the Frank R. Howard Foundation to build a 25-bed replacement hospital. Adventist Health, which leases the existing Howard Memorial Hospital, will provide $58 million to build its replacement and will lease the land where the new facility will be located, Adventist spokeswoman Rita Waterman said. The new hospital campus will contain an eight-acre garden that will provide organic produce for the hospital. It will be irrigated with help from a solar-powered pump. The hospital will be constructed along specifications set by the U.S. Green Building Council's Leadership in Energy and Environmental Design program, according to the foundation's Web site. The facility has its roots in a 1927 gift from Charles S. Howard, owner of the famed racehorse Seabiscuit, who donated money to build a hospital in Willits after his 15-year-old son was in a car accident in a rural area outside the community and died when there was no hospital nearby to treat him, according to the Web site. The Frank R. Howard Memorial Hospital opened in 1928 and, in 1966, the foundation was established as the owner of the hospital.
TUSTIN, Calif.—The former chief financial officer of 22-bed Tustin Hospital and Medical Center has admitted to paying kickbacks for patients recruited from streets and shelters in and around Los Angeles to be admitted for care billed to Medicare and Medicaid. Vincent Rubio's guilty plea to charges marks the first time during a broader investigation of patient recruiting that federal prosecutors have named a defendant associated with Tustin-based Pacific Health Corp., the for-profit parent of Tustin Hospital as well as 180-bed Los Angeles Metropolitan Medical Center, both of which were implicated in the scheme in a related lawsuit brought by the Los Angeles City attorney's office. Pacific Health did not immediately respond to requests for comment. In his plea agreement, Rubio admits cutting checks to a company owned by Estill Mitts, who has admitted running a phony assessment center in the area of Los Angeles known as Skid Row, and a second unnamed recruiter. The hospital collected $10.6 million from the state and federal health programs based on the fraud, prosecutors said in a court document outlining the allegations. Rubio, 49, faces 15 years in prison and is scheduled to make his first court appearance March 1. The U.S. attorney's office in Los Angeles also previously reached plea agreements with Mitts and three executives of City of Angels Medical Center in Los Angeles, all of whom await sentencing (Feb. 8, p. 20).
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