California hospital suspends all services, notifies 524 employees of possible layoffs

Tulare (Calif.) Regional Medical Center shut down Oct. 29, as the local healthcare district is voluntarily suspending its license with the state to operate the 112-bed hospital, as well as clinics and other outpatient facilities, according to the Fresno Bee.

Although the hospital officially shut down Sunday, the facility stopped admitting new patients earlier in the week. At a board meeting Wednesday night, Kevin Northcraft, president of the Tulare Local Healthcare District, said the hospital's 23 patients were being transferred to other medical facilities, according to the report.

Tulare Regional Medical Center filed for Chapter 9 bankruptcy in late September. At that time, the hospital had zero cash in its bank accounts, and the board said the facility faced closure. In a Worker Adjustment and Retraining Notification Act notice sent to hospital workers Wednesday, the hospital's management company, Tulare-based HealthCare Conglomerate Associates, said the "sudden and unexpected" bankruptcy filing is what prompted the company to suspend operations at Tulare Regional Medical Center.

Tensions have flared between HCCA and the healthcare district for months, and the district recently filed a motion in bankruptcy court seeking to oust HCCA. On Wednesday, the bankruptcy court granted the district's request to sever its contract with HCCA and find a new management company.

Although the transition is not slated to take place until Nov. 27, HCCA said it had to suspend operations at the hospital on Oct. 29 because of financial pressure.

"Due to the district's declaration of bankruptcy, failure to meet its funding obligations under the [management services agreement] and the bankruptcy court's rejection of the MSA, HCCA is faced with faltering financial conditions and is forced to temporarily suspend all its operations at TRMC until additional funding or other arrangements can be secured," states the WARN notice.

HCCA said it would permanently cease operations at Tulare Regional Medical Center and terminate all 524 employees if the district fails to meet its funding obligations under the MSA by Nov. 27 or if the district appoints an interim operator of the hospital.

The district board voted to temporarily suspend the hospital's license to prevent the state from shutting down the facility if HCCA exited without a clear handover plan in place, according to the Valley Voice.

The district has approached Fresno, Calif.-based Community Medical Centers about taking over management of Tulare Regional Medical Center, but no application to transfer management has been submitted to the state.

More articles on healthcare finance:

Los Angeles hospital to close, lay off 638 employees
Shareholders push for changes at Tenet and CHS: 6 things to know
Florida hospital to suspend all services as it seeks capital

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