PENNINGTON GAP — Lee Regional Medical Center will cease operations on Oct. 1 because of reimbursement cuts associated with Obamacare, extremely low community use of the hospital and a lack of consistent physician coverage, Wellmont Health System announced Wednesday.
The 70-bed facility has operated in Pennington Gap, Va., for more than 70 years, and had joined Wellmont in 2007.
“We had certainly hoped Lee Regional could remain open as a hospital and continue serving the community, but the difficult realities facing our facility are too much to overcome,” Fred Pelle, the hospital’s interim president, said in a prepared release. “We remain committed to serving the health needs of people who live and work in Lee County and will assist them in whatever way possible in this transition.”
Wellmont said the closure is due in part to major cuts in Medicare reimbursements by the federal government associated with Obamacare and a lack of Medicaid expansion by the commonwealth of Virginia. Another factor is the additional two percent cut in Medicare reimbursements enacted because of the federal sequester, according to Wellmont.
Wellmont said more than 60 percent of the hospital’s payments comes from federal and state programs.
Virginia has put Medicaid expansion in the hands of a commission consisting of delegates and senators but has reached no conclusion.
“These political decisions clearly can have dire ramifications for small communities and the hospitals that serve them,” said Denny DeNarvaez, Wellmont’s president and CEO. “For months, Wellmont and other health systems in the region and across the country have outlined the consequences of these cuts on community health. While our local legislators have been understanding, there is simply not a supportive state or national climate overall to effectively resolve this matter.
“The national goal is to reduce costs and keep people out of the hospital. This is a noble initiative, but the cuts are hitting faster than struggling rural hospitals can respond.”
Wellmont said another matter affecting Lee Regional’s ability to continue as a hospital is finding physicians to take call coverage at the hospital.
Pelle said physicians who provided call coverage notified Lee Regional administrators that they would no longer provide this service as of Oct. 1.
“Hospitals rely on physicians from the community for call coverage,” Pelle said. “When that coverage is no longer available, no one can appropriately manage patient care in the hospital. We cannot create the quality or environment of care the community needs and deserves without a reservoir of physician coverage.”
Additional efforts to work with these physicians on a potential solution produced no plan that was sustainable for the hospital and the community, Pelle said.
Wellmont also said the hospital has experienced financial challenges due to a decrease in the number of patients in an economically distressed community obtaining care at the hospital. The hospital made several changes to respond to changing patient needs and reduced revenue, including reducing inpatient and intensive care services.
“Unfortunately, since that time, community usage of the hospital has continued to decline to an average daily census of only a handful of patients,” Pelle said. “Emergency department and outpatient volumes have also fallen during this time. Even though we made appropriate adjustments in our staffing volumes, the financial losses were expected to be $4 million or more per year in the coming years.”
Pelle said Lee Regional is focused on helping co-workers at the hospital obtain new jobs. The hospital employs about 140 people, slightly more than 1 percent of the county’s workforce, and these co-workers will receive severance pay.
Wellmont said primary care services will continue to be available through the Wellmont Medical Associates practices of Drs. Monika Karakattu, Sidney Gilbert and Patrick Molony in Pennington Gap and Jonesville.