Family Hospital at Papillion (Neb.) abruptly closed late March after its sister hospital, Family Hospital at Millard in Omaha, shut down at the end of January. Both hospitals were part of Texas-based Family Hospital Systems.
The closures resulted in around 72 layoffs, Henry Higgins, MD, CEO of Family Hospital Systems, confirmed with Becker's.
"We did not want to close them," Dr. Higgins said. "We were forced to for financial reasons."
The hospitals were on the brink of becoming accredited to receive CMS reimbursement .
"It's very difficult to operate a hospital system without being in network and with no CMS designation," Dr. Higgins said. "The way that the system is set up is it was taking us literally years to get that accomplished, so we ran out of money trying."
The two hospitals provided final payroll on time, but Dr. Higgins said a former employee erased the whole system that held paid time off information.
"As of today, we have still not received any PTO payout," Kieley Longwell, a former employee at Family Hospital at Papillion, said in a statement shared with Becker's. "Due to the pending PTO no employee is eligible for unemployment benefits. We are also not able to roll over our retirement funds due to the pending payment."
Family Hospital System is actively working to make sure the former employees get paid as soon as possible.
While the future of the hospitals is uncertain, the hospital system is in talks with others in the market with deeper pockets to potentially partner.
"We would love to reopen them tomorrow," Dr. Higgins said.
Editor's note: This story was updated on April 5 at 3:30 p.m. CT.