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Wellmont to close Virginia hospital, points to Obamacare, patient loss

Staff Report • Sep 11, 2013 at 11:20 AM

Citing "reimbursement cuts associated with the Affordable Care Act, extremely low community use of the hospital and a lack of consistent physician coverage," Wellmont Health System announced Wednesday the closure of Lee Regional Medical Center in Pennington Gap, Va., effective Oct. 1.

In a news release to local media, Wellmont officials directed patients in the nearby community to seek treatment at Lonesome Pine Hospital in Big Stone Gap, Va., 21 miles to the northwest, or Holston Valley Medical Center, 45 miles to the southwest in Kingsport.

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,Va.

The release points to major cuts in Medicare reimbursements by the federal government associated with the Affordable Care Act, also known as Obamacare, and a lack of Medicaid expansion by Virginia's legislature as partially responsible for the 70-bed hospital's closure. Another factor is the additional 2 percent cut in Medicare reimbursements enacted because of the federal sequester.

According to Wellmont officials, the facility was also unable to reach an agreement with physicians to provide reliable on-call coverage to properly manage patient care.

Despite recent layoffs and budget cuts, Lee Regional has also experienced significant financial losses because of dropping patient volumes.

Financial analysts expected the hospital to lose more than $4 million per year in the coming years.

The released statement says the health care provider will attempt to secure other employment for the approximately 140 workers after the facility is shuttered. Those employees will receive severance pay.

The rural hospital has operated in Pennington Gap for more than 70 years, and was purchased by the Wellmont system in 2007.

In June, Wellmont announced 50 layoffs from three of its Virginia hospitals, which included Lee Regional.

Last week, Johnson City-based Mountain States Health Alliance announced it would no longer contract with Wellmont's Marsh Regional Blood Center for blood supply services, just two days before Wellmont announced a rejected contract proposal with insurance provider United Healthcare.

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