San Diego Hospice (SDH) announced on Feb. 13 that it will close its doors, ceasing all operations over the next 60 to 90 days. The news comes after the organization filed for bankruptcy on Feb. 4 — the result of an ongoing audit by Medicare.
SDH will work with area hospices, including Scripps Health, who recently purchased Poway-based Horizon Hospice, to get existing patients transferred as quickly as possible.
“This is obviously a difficult decision for all of us associated with San Diego Hospice. The plan we have put forward will allow us to take immediate steps to stop incurring debt, which increases every day we remain in operation,” said SDH CEO Kathleen Pacurar in a statement. “We are taking this course after many months of discussions to resolve our financial challenges, including talks with Scripps asking for their help. Our decision to file bankruptcy was based on our need to maintain continuity of patient care as we worked through the details of this plan. We believe this is the best course for our patients and their families, and for San Diego Hospice.”
Attorneys for SDH filed a set of motions in U.S. Bankruptcy Court on Feb. 13, the terms of which included Scripps’ offer to purchase San Diego Hospice’s hospital and headquarters building and to hire enough San Diego Hospice employees to care for current patients. Funds from the building purchase would be used by San Diego Hospice to pay for its operations and avoid taking on more debt as it winds down its business. The deal would also include Scripps' purchase of San Diego Hospice’s electronic medical record license and associated computer equipment to allow for a smooth transition of patient care.
“San Diego Hospice has provided an important service to this community for many years and we are saddened that they are no longer able to continue their mission,” said Chris Van Gorder, president and CEO of Scripps Health. “In our talks with San Diego Hospice, we both agreed that we did not want to see patients fall through the cracks during this process, and we wanted to help as many hospice employees as we could. Our hope is that the court will accept the whole set of proposals so that there can be a smooth transition of care for these patients, and there are opportunities for San Diego Hospice staff to remain employed to continue providing that care.”
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With the recent developments at San Diego Hospice (SDH) — starting with a Medicare audit questioning how the organization qualifies patients for reimbursement and ending with SDH applying for Chapter 11 bankruptcy on Feb. 4 — San Diego has been left to wonder what will become of the hospice care that was once so readily available.
Swooping in to answer that question is one of the region’s largest health-care providers, Scripps Health. With SDH’s ongoing investigation and resultant downsizing, Scripps — the largest referral source for SDH — has stepped in to relieve some of the deluge of patients.
“We’ve never opened our own hospice because the community needs were being met by San Diego Hospice, Elizabeth Hospice and other hospices in the community,” said Chris Van Gorder, Scripps president and CEO. “We were approached a couple months ago [by SDH] when they realized they were going to have these challenges, because we were all concerned. They were concerned, and I was concerned, about the patients being cared for in hospice and we wanted to make sure together that their care would not be disrupted in any way.”
At the suggestion of SDH, Scripps made the decision to go into the hospice business. And because becoming a new hospice care provider in California entails a long and arduous licensing process, Scripps decided to purchase a smaller organization, Poway-based Horizon Hospice, allowing patient care to begin — and continue, for Horizon’s existing patients — almost immediately, as opposed to the delay that could have taken up to a year.
“We were concerned that San Diego Hospice’s challenges might not permit a long ramp up and licensing process, so that’s why we purchased a hospice instead,” Van Gorder said. “Now we have the licensure in place already.”
As to the question of how SDH, the state’s largest hospice, found itself in this situation in the first place — and how other providers can assure they don’t suffer a similar fate — Van Gorder admitted “there are individuals concerned about the rigid rules Medicare has set up around patients that qualify for hospice care.”
“But the way I look at it is that rules are rules,” he said. “There are a lot of hospice organizations around the country that are following the rules, and it requires a lot of administrative and clinical oversight. And who knows — maybe the rules will change over time. But our responsibility — and we’re a heavily regulated industry, and that’s the reason we have a significant compliance department — is to make sure we do everything we can to follow the guidelines set up by the government.”
In the meantime, Horizon, which was operating as a for-profit hospice, will eventually be converted to a not-for-profit organization over the next few months. Presently, Scripps has only Horizon’s existing patients in its care, but the relatively quick nature of the purchase means it now has the ability to begin accepting new patients — including those who may otherwise have been turned away from SDH.
“Obviously, this is not something we were planning on doing,” Van Gorder said. “But we try to do everything we do well, and we will do that in this case, as well. And, of course, we will be monitoring the developments at San Diego Hospice closely, just as rest of community will.”
For more information, visit www.scripps.org.