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Reimbursement cuts drive L.A. hospital for the poor into bankruptcy

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The Wall Street Journal reports that Gardens Regional Hospital and Medical Center Inc. filed for protection under Chapter 11 of the U.S. Bankruptcy Act  “after losing money providing health care to depressed southern Los Angeles neighborhoods, where fewer patients can afford the cost of health care.”

Lawyers who put the 137-bed hospital into protection  said that since 2010, state and federal medical insurance programs have slowly cut reimbursement to it, which had more than 8,500 emergency-room patients last year.

“The [hospital] is a vital part of Los Angeles County’s healthcare safety net, serving some of southern California’s most medically vulnerable residents,” said board member David Herskovitz said in court papers.

The WSJ reported: “Mr. Herskovitz added that more patients have health insurance after President Barack Obama signed the Affordable Care Act in 2010, a sweeping overhaul of the U.S. health-care system that requires most people to carry insurance. The increase in insurance money wasn’t enough, though, to offset the lower payments from government programs.”

But, he said: “This was grossly overshadowed by the annual loss of [federal Medicaid program] payments that had previously enabled the [hospital] to treat the local low-income population. This population continues to be chronically underinsured or have insurance with high deductibles which they cannot afford to pay.”


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