Wednesday, June 06, 2018

Entrepreneur convinces California town to let him buy hospital in hopes of saving it with remote lab-services billing

Rural hospitals have been making headlines lately because of questionable laboratory-billing schemes designed to take advantage of higher government reimbursements for rural health-care providers. The schemers buy struggling hospitals and use them to billing for lab services actually provided at other hospitals.

Insurance companies and some in Congress are crying foul over the practice, but one Denver entrepreneur pitched a version of it as a way to save a struggling rural hospital he wanted to buy — and the town agreed. On June 5 the Northern California town of Cedarville voted 83 percent in favor of allowing Beau Gertz to buy the bankrupt 26-bed Surprise Valley Community Hospital, the hospital's interim administrator, Bill Bostic, told The Rural Blog.

Gertz, who owns laboratory and nutraceutical companies, promised the town that he would retain vital services, and that "he’d like to open a 'wellness center' to attract well-heeled outsiders — one that would offer telehealth, addiction treatment, physical therapy, genetic testing, intravenous vitamin infusions, even massage," Heidi de Marco and Barbara Feder Ostrov report for Kaiser Health News. "Cedarville’s failing hospital, now at least $4 million in debt, would not just bounce back but thrive, he said."

His plan to pay for the improvements: Doctors at the hospital would help remote patients through telemedicine, and that way lab-test bills could be issued through the hospital, regardless of where the patients live. "If you do it correctly here is a nice profit margin," he told Kaiser Health News. There [are] extra visits you can get from telemedicine but … it has to be billed correctly and it can’t be abused."

The people of Cedarville were skeptical, since other outsiders had made similar pitches. But they were evidently swayed by his vision, if yesterday's vote is an indication. "The people of Surprise Valley want to keep health care in the valley, and this is how they want to do that," Bostic said.

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