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The interim CEO of the financially strapped Springfield (Vt.) Hospital says that its financial structure is unsustainable and its survival will be “virtually impossible” unless it merges with other hospitals in its region, VTDigger.com reported. Michael Halstead, the interim CEO of Springfield Hospital, which filed for bankruptcy in June as it tries to restructure about $20 million in debt, presented its proposed budget Wednesday to the Green Mountain Care Board. The hospital is in merger talks with Mt. Ascutney Hospital in Windsor, Vt., and the Valley Regional Hospital in Claremont, N.H., with the support of Dartmouth Hitchcock Medical Center, which is already affiliated with the other two organizations. After months of financial strain, Springfield Hospital is expecting to lose $6.5 million by the close of the fiscal year, and in a proposed budget for next year, still projects a loss of about $1 million. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

A series of deals struck in the halls of a Delaware courthouse have averted a sudden shutdown of St. Christopher’s Hospital for Children, a thriving institution linked to Philadelphia’s failed Hahnemann University Hospital, WSJ Pro Bankruptcy reported. Hahnemann, St. Christopher’s and related medical businesses filed for chapter 11 bankruptcy protection in July, with plans to close Hahnemann and sell St. Christopher’s. Financing to get to a sale was offered by MidCap Financial Trust, but creditors objected, saying MidCap wasn’t offering enough money. After two days of hearings, Judge Kevin Gross said on Tuesday that he agreed with Hahnemann’s creditors and wouldn’t approve the loan without concessions from MidCap. But yesterday, Hahnemann lawyer Mark Minuti reported that MidCap had agreed to a deal. Instead of an additional $2 million to keep the operation running until money starts coming in from sales, a revised deal means Hahnemann and St. Christopher’s will have as much as $9 million in fresh cash to cover the bills in the coming weeks, Mr. Minuti reported. At a hearing in the U.S. Bankruptcy Court in Wilmington, Del., Judge Gross said that he will sign off on the changed loan agreement, keeping the money flowing to the hospitals and curing what Minuti called on Tuesday “a little bit of a crisis.” Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

Springfield (Vt.) Medical Care Systems said some local banks have put patients' refund checks on hold if they were issued but not cashed before June 26, Becker's Hospital Review reported. The health system, which includes 25-bed Springfield (Vt.) Hospital and nine community health centers, made the announcement on Aug. 17, nearly two months since it filed for chapter 11 protection. As the health system goes through bankruptcy reorganization, a hold is required on any checks issued, but not cashed before the bankruptcy filing date, hospital officials said. "These transactions are included as part of the bankruptcy proceedings governed by the bankruptcy court," they added. "SMCS and Springfield Hospital sincerely regret any hardships this has caused our patients. SMCS and Springfield Hospital are working with counsel and doing everything else possible, within the restrictions imposed by the bankruptcy code, to manage the situation." The health system has said that it expects the bankruptcy reorganization process to last about 12 months.

When its private-equity owners placed Hahnemann University Hospital into bankruptcy protection in July, they left the valuable chunk of Center City Philadelphia real estate on which the hospital sits outside the proceedings. This week, Hahnemann’s sprawl of buildings and land in the heart of Philadelphia, a hot spot of protests over the loss of medical care for the poor, came into focus as a major target of the failed hospitals’ creditors, WSJ Pro Bankruptcy reported. Due to its location in a boom area of Philadelphia’s government, business and historic center, Hahnemann’s real estate has sparked interest among developers. Creditors are keeping one eye on the real estate, and another on money moving in and out of the bankruptcy case, trying to gauge the chances they will be paid. Hahnemann as an operating hospital is all but gone, with no patients and firm plans to shut the facility down, despite demands that it be saved, Mark Minuti, lawyer for Hahnemann, said at a hearing on Monday in the U.S. Bankruptcy Court in Wilmington, Del. Other assets are being sold, such as a program that had hundreds of residents, which brought a $55 million bid at auction. However, the real estate that is under the control of Hahnemann’s private-equity owners, led by Joel Freedman, remains beyond the reach of most creditors. One exception is MidCap Financial Trust, which offered bankruptcy financing that Hahnemann said averted an emergency shutdown. Creditors said the chapter 11 loan offers too much to the lender and does too little to cushion the blow of Hahnemann’s financial collapse.

Astria Health CEO John Gallagher said that it is making progress on its goal to emerge from bankruptcy protection by year’s end, the Yakima (Wash.) Herald reported. He again emphasized the “unique situation” that led to the organization filing for chapter 11 protection on May 6. Most health care systems and hospitals are forced into bankruptcy because their expenses or liabilities are far above their revenues and assets, he said. But in Astria’s case, a vendor was unable to collect $75 million in billing claims over nine months, causing a significant hit to cash flow. “We had a positive income statement,” he said. “We had a mechanical issue with our billing and collecting.” Since filing for bankruptcy protection, Astria Health has made progress on its billing and collection through a new revenue cycle vendor, Gallagher said. The improvement in collections has provided Astria Health and its facilities enough cash flow to continue day-to-day operations without having to tap all of the $36 million in debtor-in- possession financing approved by the court, Gallagher said. Most of the financing — approximately $21 million — was used to pay off two creditors, Banner Bank and MidCap Financial Trust. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

More than 550 residency slots at a Philadelphia teaching hospital have fetched a $55 million winning bid at a bankruptcy auction ahead of the facility's impending closure, the Associated Press reported. The residency slots at Hahnemann University Hospital were won by a team of six local health systems at Thursday's auction, topping bids by Tower Health and a California company that wants to reopen the hospital. Christiana Care Health System, Cooper University Health Care, and Main Line Health joined Einstein Healthcare Network, Jefferson Health and Temple University Health System in the winning bid. The salaries and benefits of those residencies are paid by Medicare, which has objected to the sale in bankruptcy court.