The demand for luxury hospital care in Texas may not be as strong as some thought.
Forest Park Medical Center, which operates three luxury facilities in the Dallas area, filed for Chapter 11 bankruptcy late last week, claiming about $13.6 million in liabilities, the Dallas Business Journal reported. The facility is continuing to operate, according to the article.
That is not the case for Forest Park's facilities in San Antonio and Dallas, both of which filed for bankruptcy last year and closed, putting a combined 235 employees out of work, the publication noted. A planned hospital in Austin has also filed for bankruptcy protection and has not opened. And Forest Park's facility in Southland, Texas recently defaulted on a $9 million equipment loan. Forest Park's management is currently seeking a buyer for the three hospitals still operating, the Business Journal reported.
Since the hospital chain is physician-owned and relatively new, it is barred from participating in the Medicare program, which may hamper its ability to grow revenue. Many physician-owned hospitals have numerous financial challenges, including the Affordable Care Act's ban on newly-built hospitals participating in Medicare, as well as prohibitions against grandfathered facilities from expanding. A report by the Office of Inspector General of the U.S. Department of Health and Human Services suggested that physician distributorships in other fields of healthcare delivery are ripe for fraud.
However, the company's management is facing other issues. One of Forest Park's founding physicians, anesthesiologist Richard Toussaint, M.D., was indicted last year on federal fraud charges for allegedly billing insurers for services that were not performed, FierceHealthPayerAntiFraud previously reported.
To learn more:
- read the Dallas Business Journal article