Georgia hospital to close July 26

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Chestatee Regional Hospital in Dahlonega, Ga., will close July 26, making it the seventh rural hospital in Georgia to close since 2010.

Chestatee Regional is among a group of rural hospitals across the nation allegedly involved in lab billing schemes. A CBS News investigation earlier this year included allegations that the hospital's owner was using the hospital to reap huge paydays from insurers. A spokesperson for the owner told Becker's the claims made in the CBS News report will be "vigorously defended in court." 

In 2016, Sunrise, Fla.-based Durall Capital Holdings purchased Chestatee Regional from Atlanta-based SunLink Health Systems for $15 million. Aaron Durall, who owns a laboratory testing company in Florida, leads DCH.

After the sale, Mr. Durall allegedly moved part of Chestatee Regional's billing operation to Florida. Soon thereafter, the hospital allegedly began receiving big checks from health insurance companies — some up to $500,000. The money was for toxicology tests on urine samples collected from across the country, according to CBS. Some of the testing was allegedly done at Mr. Durall's lab in Florida, but everything was billed through Chestatee Regional Hospital, according to CBS.

Insurance companies reimburse some rural hospitals at higher rates to help keep healthcare in rural communities. Mr. Durall reportedly capitalized on this by buying Chestatee and a few other rural hospitals.

Mr. Durall has defended the billing practices. In an email to CBS earlier this year, he said the lab testing mentioned in CBS' investigative report was properly billed.

Although Chestatee Regional is shutting down this week, the facility may offer some type of healthcare services in the future.

On March 30, Gainesville-based Northeast Georgia Health System announced it had reached a conditional agreement to buy Chestatee Regional Hospital. If the sale goes through, NGHS intends to eventually sell the property to the University of North Georgia in Dahlonega, according to The Gainesville Times. UNG President Bonita Jacobs, PhD, said the facility could house nursing, physical therapy and counseling education programs, as well as two existing outreach clinics.

A spokesperson for Mr. Durall told Becker's "the sale of the hospital was underway before the CBS News report." 

More articles on healthcare finance:

For-profit hospital operators by the numbers: A look at HCA, Tenet, CHS, LifePoint and UHS
Why a Missouri hospital can't afford accounting help after a 2,353% spike in revenue
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