News: Poor documentation training cited as one reason for possible hospital closure

CDI Strategies - Volume 13, Issue 29

Citing severe financial difficulties, Hahnemann University Hospital in Philadelphia will close its doors in early September of this year with inpatient admissions ceasing in July, according to a FAQ on the hospital’s website.

Since its purchase by the California-based American Academic Health System in January 2018, Hahnemann has routinely lost between $3 million and $5 million per month, Joel Freedman, the president and CEO of American Academic Health System, told the Philadelphia Business Journal.

According to Freedman, there were four major factors that caused the financial hemorrhage:

  • The hospital was not successful in getting commercial insurers to negotiate new contracts
  • Volume dropped from an average of 300 patients per day to between 200 and 250
  • The academic training program Hahnemann operates through its affiliation with the Drexel University School of Medicine is on pace to lose $30 million this year
  • The lack of clinical documentation training for physicians has resulted in downgrades and denials from insurers

The denials situation has gotten so dire, Freedman estimated that the hospital is only being paid for 50% of the services it provides. Additionally, the hospital has a high rate of observation stays, which are reimbursed at a lower rate than an inpatient admission would be, according to the Philadelphia Inquirer.

The closure will leave thousands of healthcare professionals out of work, hundreds of medical residents without placement for the year, and an untold number of patients without a hospital close-by. Though the plans to close are final according to the hospital, the employees of the hospital and members of the Drexel administration, among others, are seeking a legal recourse to save the organization.

Editor’s note: If you’re involved in the denials management or appeals process at your organization and are willing to contribute to the CDI Journal, contact ACDIS Editor Linnea Archibald (larchibald@acdis.org). To read Hahnemann’s announcement of the closure, click here. To read the Philadelphia Business Journal’s coverage of this story, click here. To read the Philadelphia Inquirer’s coverage of this story, click here. To learn more about CDI’s involvement with denials management, check out this on-demand ACDIS webinar on the topic.