Physician-owned hospital chain struggles with closures

A for-profit, physician-owned hospital chain focused on the luxury market has apparently hit a rough patch.

Forest Park Medical Center in Dallas closed suddenly late last week, according to the Dallas Morning News. It's the second hospital in the Forest Park chain to close in less than a month. Its property in San Antonio closed its doors in mid-October, the Dallas Business Journal reported. In both closures, employee payrolls were apparently missed just before the doors officially shut, according to the Business Journal.

"We're doing what we can do," Todd Furniss, chairman of the management company for Forest Park told the Morning News. Furniss said the Dallas property could reopen within a couple of days, although the newspaper did not delve into the licensure issues involved with reopening a closed facility.

A third Forest Park hospital in Frisco, Texas, filed for bankruptcy organization in mid-September but is continuing to operate, according to the Morning News.

Furniss said the Dallas facility's closure was connected to its inability to draw on its line of credit. "This all is arising out of the perhaps unintended consequences of the Affordable Care Act (ACA)," he told the Morning News. As physician-owned facilities, many members of the Forest Park medical staff have to practice elsewhere to treat Medicare and Medicaid patients as a result of a bar against expanding such facilities, Furniss said.

Government agencies such as the Department of Health and Human Services' Office of Inspector General have taken a dim view on business relationships where physicians have an opportunity to self-refer, such as with distributorships for medical devices.

Physician-owned hospitals have often had to engage in a tap dance to ensure a solid revenue flow, often focusing on services that are not proscribed by the ACA, such as rejecting Medicare patients (as Forest Park did) or expand hours for performing outpatient procedures.

To learn more:
- read the Dallas Morning News article 
- check out the Dallas Business Journal article