University Medical Center of El Paso (Texas) has laid off 56 employees because El Paso Children's Hospital has been unable to pay UMC the $70 million it owes, according to an El Paso Inc. report.
The children's hospital opened in 2012 as an addition to UMC, and is a nonprofit separately licensed hospital, according to the report. It experienced cuts to Medicaid reimbursements and lower than expected patient volumes that greatly affected its budget, making it unable to pay UMC for contracted services.
"If Children's would pay, we could avoid this situation. The lack of payment leaves a hole in my budget and I have to fill it," James Valenti, UMC's CEO, told El Paso Inc.
No one from Children's commented on the layoffs, according to the report.
The layoffs will save UMC $2.2 million, according to the report. Medical personnel were not affected by the workforce reduction.