Hospital files for bankruptcy after patient safety violations

Following a recent investigation into patient safety violations of Saint Catherine Medical Center, owner Saint Catherine's Hospital of Pennsylvania filed for Chapter 11 bankruptcy Monday, the Republican Herald reported.

The state health department in March conducted a surprise visit to the Ashland, Penn., hospital and found serious violations, including a lack of surgical gloves, syringes, needles and medicated soap, as well as faulty X-ray equipment. The health department declared St. Catherine Medical Center in immediate jeopardy and shut down its emergency room and outpatient services.

Plagued by crippling finances, Saint Catherine Medical Center, Saint Catherine Regional Hospital and Saint Catherine Healthcare in March were ordered to pay a $168,760 judgment to Lease Associates, HealthLeaders Media reported. In addition, PPL Electric Utilities filed a lawsuit last month.

The American Federation of State, County and Municipal Employees, District Council 89, AFL-CIO also are claiming they are due wages and benefits.

Attorney Amy L. Rosenberger of the Philadelphia law firm Willig Williams & Davidson told HealthLeaders, "There are claims for unpaid employee wages, failure to properly disburse funds withheld through employee payroll deduction (including employee contributions toward healthcare, the 401(k) plan, and union dues), as well as failure to comply with federal law governing mass layoffs of employees." She said, "It appears that the improper use of employee payroll deductions has been going on for some time, without the employees' knowledge."

After a Tuesday meeting between 80 former hospital employees and Saint Catherine Medical Center owner Robert Lane, workers walked away frustrated with few answers, the News Item reported.

Echocardiographer Christine Hamilton said she noticed problems more than a month ago regarding getting paid on time. "Our pays started to become late, and two weeks later, our pays didn't happen - and still hasn't happened," she said. "Personally, they owe me three weeks of pay, but there are other people who are owed six weeks."

The U.S. Department of Justice has appointed attorney William G. Schwab to be the Chapter 11 trustee of the medical center, who will soon be taking charge of the hospital's facilities. The government-appointed trustee will reorganize the failing business, the Republican Herald noted.

"Chapter 11 is a situation where you attempt to reorganize the corporate facilities so that the corporation continues on, be it as a hospital or something similar," Schwab told the Republican Herald.

With a history dating back to 1883 as a state hospital for coal miners, railroad workers and textile workers, the hospital has a "rich history," Schwab acknowledged.

"[W]hen all is said and done ... 2012 will not be the date of the last admission," Schwab said, adding that he would like to "do what is right" for the employees, community, patients, physicians and shareholders.

For more information:
- read the Republican Herald article
- here's the HealthLeaders Media article
- read the News Item article

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