Hospitals in Missouri, Kansas file for bankruptcy

Overland Park, Kan.-based Pinnacle Healthcare System and its hospitals in Missouri and Kansas filed for Chapter 11 bankruptcy protection on Feb. 12.

Pinnacle Regional Hospital in Overland Park, formerly known as Blue Valley Hospital, entered bankruptcy with assets totaling between $10 million and $50 million and liabilities within the same range, according to bankruptcy court documents. The hospital, which was acquired by Douglas Palzer in 2018, lost its Medicare contract two years ago. CMS terminated the contract after determining the hospital did not "primarily engage" in providing inpatient care, a requirement for Medicare participation.

Pinnacle Regional Hospital in Booneville, Mo., formerly known as Cooper County Memorial Hospital, also entered bankruptcy Feb. 12. The bankruptcy filing comes after the hospital abruptly shut down in January.  

The hospital closed about a month after the Missouri Department of Health and Senior Services inspected the facility and cited it for sterile processing procedures. The health department ordered the hospital to stop performing surgery until the sterile processing unit was upgraded, according to KCUR.

Hospital officials initially said they were working with the state to rectify the situation, but they ultimately decided to close the facility instead of making the repairs.

"Following further discussions with the Missouri Department of Health and Senior Services, it has been determined that the economic hardship of bringing the facility into compliance is too great to make the appropriate repairs necessary," reads a Jan. 15 statement from the hospital.

In January, Mr. Palzer warned employees at both hospitals that Pinnacle may be forced to file for Chapter 11 bankruptcy, according to KSMU. He said the bankruptcy process would allow the health system to continue operating and shutter unprofitable units. Over the past six months, Mr. Palzer personally invested roughly $4 million into Pinnacle to keep the company viable and make payroll.

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