Andrew Cass
California hospital board clears path for bankruptcy filing
The leadership of Blythe, Calif.-based Palo Verde Hospital was granted the authority to file a Chapter 9 bankruptcy petition, should it become necessary, The Riverside Record reported July 17.
The Palo Verde Healthcare District board of directors granted the authority to the hospital’s CEO and interim CFO less than a month after declaring fiscal emergency, according to the report.
Interim CFO Michael Rose said the need for the fiscal emergency declaration was the result of a “series of compounding financial crises,” according to the report. Those include pandemic-related costs, protracted litigation in 2024, major operating system replacements, a cyber incident that paused billing for 45 days and the sudden resignation of key finance leadership. Provident Bank in May also took money from the district’s accounts to pay back a $2.8 million line of credit.
Mr. Rose said the hospital has have taken a number of steps to stabilize finances, including requesting $4 million in emergency funding from the state of California; limiting hospital operations to the emergency department ancillary services related to emergency care and the community clinic; and developing a 60-day emergency plan that includes layoffs and furloughs, the cancellation or nonrenewal of contracts, reductions in medical services and contract and loan modifications.
Chapter 9 bankruptcy allows financially distressed cities, hospital districts and other public entities protection from creditors while they develop and negotiate plans for adjusting debt. A bankruptcy declaration is one of several possibilities on the table for the 51-bed hospital.
“There are many options: continued operations, a merger, Riverside University Health System coming in, a potential sale,” Lena Wade, the district’s general counsel, said, according to the Record. “All of that takes time, and many of these options require a vote of the residents of the district, so our advice is that we need to have this as an option.”
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Moody’s upgrades Prime Healthcare’s credit rating
Ontario, Calif.-based Prime Healthcare’s rating was upgraded to “B2” from “B3” by Moody’s.
The upgrade reflects material improvement in the health system’s EBITDA and EBITDA margin in recent quarters as it cut its temporary clinical labor utilization and expenses, reduced leasing costs and optimized underperforming hospital operations, Moody’s said in a July 16 report.
Moody’s also said that the rating was supported by its good scale and track record of turning around underperforming or distressed hospital assets.
Prime has a stable outlook at its new rating.
In April, Prime’s rating was upgraded to “A-” from “BBB+” by Fitch Ratings.
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New Jersey hospitals lose charity care law challenge
New Jersey’s high court unanimously rejected arguments brought forth by more than a dozen hospitals that charity care is an unconstitutional taking of private property without just compensation, NJ.com reported July 16.
State Supreme Court Justice Douglas Fasciale wrote in a 46-page decision that the “heavily regulated nature of the health care industry, the long-standing tradition of hospitals caring for indigent patients, and the existence of tax benefits specifically tied to such care all diminish expectations that hospitals might be free of charity care obligations,” according to the report.
The court ruled that hospitals are free to challenge their charity compensation through administrative and legislative channels, according to the report.
The lawsuit was filed by a coalition of New Jersey hospitals that serve a disproportionate share of low-income patients, including Englewood Hospital, Westwood-based Pascack Valley Medical Center and Passaic-based St. Mary’s General Hospital, according to the report.
The hospitals argued that although they receive some taxpayer funding from the state to provide charity care, the subsidies fail to cover even the basic cost of care, the report said.
Jim Robertson, an attorney representing the hospitals, said in a statement that they believe the New Jersey Supreme Court’s analysis is flawed and is “contrary to the trend of United States Supreme Court decisions in the last decade finding wrongful physical takings occurring in regulated industries and activities.”
Mr. Robertson said the hospitals are considering whether to take the case to the U.S. Supreme Court.
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Healthcare billing fraud: 10 recent cases
From the largest National Health Care Fraud Takedown operation in the Justice Department’s history to another suspect charged in a case involving a Chicago hospital, here are 10 healthcare billing fraud cases that Becker’s has reported on since June 30:
1. Urgent care center operator Bloom Care has agreed to pay $3 million to settle allegations that it submitted false claims to federal healthcare programs for medically unnecessary testing and inflated the extent of services performed.
2. A California man who owned two durable medical equipment companies pleaded guilty to his role in a $5.9 million Medicare fraud scheme.
3. An Avon, Ohio-based physician pleaded guilty to submitting fraudulent orders for durable medical equipment as part of a telemedicine scheme that defrauded Medicare.
4. A federal judge ordered CVS Health subsidiary Omnicare to pay $948.8 million in damages and penalties for submitting fraudulent Medicare and Medicaid claims.
5. Mahmood Kahn, the owner of two allegedly fraudulent COVID-19 testing labs, pleaded not guilty to federal charges connected to what the Justice Department said is a scheme that funneled more than $290 million in federal funds for testing that never occurred.
6. A federal investigation of a suspected COVID-19 testing fraud-and-kickback scheme involving Chicago’s Loretto Hospital netted the indictment of the operator of Meridian Medical Staffing, which purported to contract with COVID-19 test collection sites in Illinois and Florida that collected specimens for PCR tests, including Loretto.
7. Minneapolis-based Nuway Alliance will pay $18.5 million to settle allegations it submitted fraudulent Medicaid claims.
8. The Justice Department, through its 2025 National Health Care Fraud Takedown investigation, charged 324 defendants in schemes involving more than $14.6 billion in intended losses to Medicare, Medicaid and other government programs.
9. The largest case from the investigation, dubbed Operation Gold Rush, involves the biggest alleged loss in any healthcare fraud case brought by the department. The $10.6 billion scheme involved 19 defendants — 12 of whom have been arrested, including four in Estonia.
10. A Michigan physician was sentenced to four years in prison for her role in a $6.3 million Medicare fraud scheme.
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SolutionHealth files to unwind 2018 merger
The executive leadership of Bedford, N.H.-based SolutionHealth is seeking to dissolve the system and return to separate, independent, board-governed systems.
The system launched in 2018 after Manchester, N.H.-based Elliot Health System and Nashua-based Southern New Hampshire Health signed an agreement to combine operations. The combined entity, SolutionHealth, aimed to provide and improve medical care through the sharing of EHRs and other advancements in medical technology. Merrimack, N.H,.-based Home Health & Hospice Care was added as a member in 2022.
The boards of SolutionHealth, Elliot Health System and Southern New Hampshire Health submitted their dissolution proposal with New Hampshire state officials on July 14. Home Health & Hospice Care will also negotiate a disaffiliation agreement, according to SolutionHealth’s website.
“After using good-faith efforts to collaborate through the combination, the hospital systems have determined that they will be better positioned to continue to provide quality, efficient physician and mental health care services in southern New Hampshire by unwinding the combination and operating separately and independently and/or with potential future third party affiliates,” the members said in their July 14 proposal.
The proposal is being reviewed by New Hampshire’s Charitable Trusts Unit, which could take up to six months.
SolutionHealth provides primarily administrative support to its members and does not provide healthcare delivery, according to its website.
“Elliot Health System, Southern New Hampshire Health, and Home Health and Hospice Care have been providing care for their communities for more than 130 years, and this will continue,” the website said.
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Methodist Le Bonheur Healthcare strikes end-to-end RCM partnership
Memphis, Tenn.-based Methodist Le Bonheur Healthcare has selected Ensemble Health Partners to manage its revenue cycle operations.
Ensemble will assume full responsibility for end-to-end revenue cycle operations across Methodist Le Bonheur’s six hospitals, according to a July 16 news release from the RCM company.
“This strategic partnership with Ensemble reinforces our mission to improve every life we touch by providing exceptional, innovative and compassionate care,” Methodist Le Bonheur CEO Michael Ugwueke said in the release. “By leveraging Ensemble’s revenue cycle expertise and innovation, we will drive meaningful financial performance improvement and operational efficiency, ultimately benefiting the patients and families we serve every day.”
With the agreement, Ensemble now manages $42 billion in net patient revenue for its clients.
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Mississippi hospital names CFO
Laurel, Miss.-based South Central Regional Medical Center has named Stephen East its new CFO, MageeNews.com reported July 15.
Mr. East comes to the hospital with more than 30 years of experience in financial and operational experience, according to the report. He most recently served as CFO of Thibodaux (La.) Regional Medical Center.
“We have big plans for the future, and we are confident that Stephen’s years of experience and proven success will aid in accomplishing those goals,” South Central’s president and CEO Gregg Gibbes said, according to the report.
South Central Regional Medical Center is in the process of acquiring Magee (Miss.) General Hospital in a merger that is expected to be completed this summer. The two hospitals have been collaborating under an administrative services agreement since July 2023.
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Senator introduces bill to reverse Medicaid cuts he voted for
Sen. Josh Hawley, R-Mo., has introduced legislation to roll back some of the Medicaid changes that he had voted for in the recently signed One Big Beautiful Bill Act.
Five things to know:
1. Mr. Hawley’s bill would repeal the provider tax moratorium and the future reduction of provider tax authority in the reconciliation bill, according to a July 15 news release from his office. He said this would “restore a key aspect of Medicaid funding that states rely on to finance their programs.”
2. The legislation would also repeal provisions in the reconciliation bill related to state-directed payments that could reduce Medicaid reimbursements.
3. He is proposing to double the total investment in the Rural Health Transformation Fund to $100 billion and extend the life of the fund from five years to 10 years. The fund was included in the reconciliation bill at his request and aims to support rural healthcare systems.
4. After voting for the passage of the bill on July 1, Mr. Hawley said that he will “continue to do everything in my power to reverse future cuts to Medicaid. If Republicans want to be the party of the working class, we cannot cut health insurance for working people.”
5. “President Trump has always said we have to protect Medicaid for working people,” Mr. Hawley said in the July 15 news release. “Now is the time to prevent any future cuts to Medicaid from going into effect … I want to see Medicaid reductions stopped and rural hospitals fully funded permanently.”
Read the full bill here.
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Urgent care operator pays $3M to settle billing fraud allegations
Urgent care center operator Bloom Care has agreed to pay $3 million to settle allegations that it submitted false claims to federal healthcare programs for medically unnecessary testing and inflated the extent of services performed.
What happened?
Bloom Care operated urgent care centers in Idaho and New Mexico throughout the COVID-19 pandemic, according to a July 15 Justice Department news release.
The department alleged that the company knowingly used the pandemic as an excuse to bill medically unnecessary streptococcus and influenza tests for asymptomatic patients.
The company also allegedly submitted claims for high-level evaluation and management services for COVID-19 patients that it knew should have been billed at a lower level of service. To justify the high reimbursement claims, Bloom allegedly exaggerated the time spent with COVID-19 patients or the complexity of the evaluation required to care for them.
The claims resolved in the settlement are allegations only, and there has been no admission or determination of liability.
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Read MoreMoody’s upgrades Prisma Health’s credit rating
Greenville, S.C.-based Prisma Health’s rating was upgraded to “A2” from “A3” by Moody’s.
The upgrade reflects the system’s maintenance of strong operating cash flow, translating into improving liquidity, Moody’s said in a July 15 report.
Moody’s also said that the A2 rating reflects Prisma’s large size, good clinical reputation and strong market position across a 21-county service area in South Carolina.
“Prisma’s good brand and position in service areas with strong population growth will drive patient demand and volume growth, particularly in outpatient service,” the ratings agency said in the report.
The system has a positive outlook at its upgraded rating, which reflects the likelihood that “continued strong financial performance will allow Prisma to maintain good liquidity and low leverage despite elevated capital spending as the system continues to invest in order to meet growing demand,” Moody’s said.
Prisma’s rating was also upgraded to “A” from “A-” by Fitch in late June. The system also has a positive outlook with Fitch.
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