Wednesday, 25 October 2017

California hospital files for bankruptcy after missing payroll

The Tulare Regional Medical Center (CA), a 112-bed hospital run by Tulare-based HealthCare Conglomerate Associates, filed for bankruptcy on Saturday in Chapter 9 bankruptcy.

The hospital declared bankruptcy a few days after HCCA, which is being paid by the local hospital district, said it had been done to pay the hospital bills. "HCCA has provided substantial revolving funding to the hospital over the years, totaling $ 14 million," said Benny Benzeevi, MD, President and CEO of HCCA at a board meeting on September 28, according to Valley Voice. "But in light of the current destructive political environment, HCCA will not continue to do so."

Tensions have erupted between HCCA and the hospital district board since last year, and this battle is partially responsible for a recent deterioration in the credit rating by Fitch Ratings.

On September 29, less than 24 hours after Dr. Benzeevi stated that HCCA would no longer provide financial support to the hospital, several nurses and other staff members left work after being paid. HCCA said a cash shortage by the hospital district was the reason why it was unable to finance the entire payroll.

The bankruptcy petition of the Tulare Regional Medical Center revealed that the hospital has no money on its bank accounts. The shortage of cash poses a risk to public health and safety, as the hospital does not have the funds to purchase adequate medical supplies and the "critical vendors" have interrupted hospital service for lack of payment, according to the report. bankruptcy documents.

Chapter 9 of bankruptcy is a bankruptcy procedure that provides municipalities in difficulty with creditor protection while a repayment plan is negotiated.

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