Los Angeles Business Journal

Operations Suspended at Three L.A. Hospital Sites

By Deborah Crowe Wednesday, April 3, 2013

Financially strapped Pacific Health Corp. on Wednesday suspended operations at Bellflower Medical Center and the Los Angeles and Hawthorne campuses of Los Angeles Metropolitan Medical Center.

The emergency departments at the facilities were scheduled to close Wednesday, with current patients continuing to receive care until they can be transferred to other hospitals, the Tustin-based hospital operator said in a statement.

Pacific Health, which made the announcement late Tuesday, also is closing Newport Specialty Hospital in Orange County, and a week ago closed began closing Anaheim General Hospital.

The closures come a week after Pacific Health was fined $7 million by the state Department of Industrial Relations following complaints that employees were receiving paychecks late and other paychecks were bouncing. In addition, premiums for benefits had been deducted from the paychecks but not paid to insurance providers.

Last year, the company agreed to pay $16.5 million in fines and restitution to the federal government in connection with an investigation into Medicare and MediCal billing fraud and kickbacks to patient recruiters between 2003 and 2008. It was alleged that homeless people were recruited to undergo unneeded tests and procedures, and Medicare and MediCal were improperly billed for them.

Los Angeles Doctors Hospital Inc., a Pacific Health subsidiary, in August pleaded guilty to a federal conspiracy charge in connection with the case.

About 1,900 full-time, part-time and per-diem employees at the five facilities are affected by the closures, a hospital spokesman said. The two Los Angeles Metropolitan facilities have 212 licensed beds each, with Bellflower Medical having 142 beds.

“We are currently evaluating all options to resume services at the hospitals,” spokesman Gary Hopkins said.