Louisiana hospital files for bankruptcy, blames ex-administrator for financial crisis

Doctors Hospital at Deer Creek, a physician-owned hospital in Leesville, La., entered Chapter 11 bankruptcy Oct. 18.

In documents filed in the bankruptcy case, Gregory D. Lord, MD, a managing member of the hospital, said a former hospital administrator is to blame for the hospital's current financial troubles.

"The Chapter 11 filing was necessitated by a financial crisis resulting from Medicare overpayments caused by the actions of a prior administrator at the hospital," Dr. Lord said.

The hospital is currently paying back certain overpayments, but it does not have enough cash flow to pay back further overpayments that are likely to be assessed.

"Because of this, Medicare is likely to offset the overpayments owed by withholding all future Medicare payments to DHDC," Dr. Lord said. "Once Medicare begins offsetting the overpayments from future payments, DHDC will have to close its hospital, as there will be insufficient financial resources for the hospital to continue operations."

DHDC leaders determined the only feasible option is to service current debts, curtail additional debts and secure a buyer. DHDC submitted a purchase proposal to the bankruptcy court.

In its bankruptcy petition, DHDC listed its assets as between $1 million and $10 million and listed its liabilities in the same range.

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