El Paso (Texas) Children's Hospital is in a tough financial situation, prompting the affiliated University Medical Center to form a committee to renegotiate and restructure the hospital's debt.
El Paso Children's owes University Medical Center El Paso $59 million, KRWG reported. The sum is due in September. The 122-bed hospital operates on University Medical Center's property and pays it more than $10 million a year for rent and for other services, according to KVIA. Taxpayers approved a $120 million bond for the hospital's construction in 2007.
However, the lingering effects of the Great Recession and changes away from cost-based Medicaid reimbursement have hit the pediatric facility's finances hard, according to the El Paso Times. The state's refusal to expand Medicaid eligibility as part of the Affordable Care Act may also exacerbate the situation.
In 2010, University Medical Center, under similar financial strain due to payment cuts, considered raising the levy within its hospital district boundaries in order to make up projected shortfalls.
The hospital has recently cut some positions due to the revenue issues, according to KVIA. El Paso Children's has not filed a 990 tax return since fiscal 2010, two years before it opened its doors, the television station also reported. Moreover, the hospital has not answered how it was able to receive an extension far beyond the 180 days typically granted by the Internal Revenue Service.
"We know that [El Paso Childrens'] board and administrative team are working hard to develop a restructuring plan that will put them on more solid financial footing so that they can continue to grow," UMC officials said in a statement, according to the El Paso Times. "The committee will begin meeting in April."