Washington D.C. Asks Court to Seize Ailing Hospital

In a filing this week, Washington officials asked D.C. Superior Court to seize control of United Medical Center, formerly called Greater Southeast Community Hospital, as the hospital has been unable to pay bills or taxes or meet its retirement plan obligations, according to a report by the Washington Post.

The court filing alleges mismanagement by the hospital's for-profit owner, Specialty Hospitals of America. Attorney General Peter Nickles alleges that some of the hospital's executives have been making $1 million annually while the hospital owes the IRS $3.9 million in back taxes and has not paid its electric bills, according to the report.

The hospital has been losing about $1 million a month since last year and is in danger of insolvency, according to the report.

Earlier this month, the city made moves to take over the hospital in the wake of defaults by Specialty Hospitals of America on loans to the city, but the city opted to go to court because Specialty still has a majority of the hospital's board members.

If the court agrees to the city's request, the hospital's chief executive and a turnaround specialist would be given control over spending decisions and would be able to operate independently of the hospital's board.

Read the Washington Post report on United Medical Center.