Louisiana Heart Hospital files bankruptcy, to wind down operations

By Caroline Salls

Pittsburgh, Jan. 31 – Louisiana Heart Hospital (LHH) and its affiliated medical group filed Chapter 11 Bankruptcy Monday in the U.S. Bankruptcy Court for the District of Delaware and plans to wind down its operations within the next month, according to a news release.

“Despite strong quality rankings and recent volume growth, Louisiana Heart Hospital has faced significant financial challenges in recent years,” Louisiana Heart Hospital & Medical Group chief executive officer Scott Boudreaux said in the release.

“Like many hospitals around the nation, we struggle to balance shrinking reimbursements with rising operating costs.

“After many months of careful consideration and review of all available options, it has become clear we can no longer sustain the continued losses and have no choice but to cease operations.”

Boudreaux said the hospital “will work to ensure a smooth and orderly transition for patients while attempting to minimize the impact for our employees and physicians.”

The hospital said it has begun the process of notifying regulators, Emergency Management Services officials and other health care providers in the community of its plans.

The LHH emergency room will remain open for a time, and staff continues to provide care to hospital patients as operations wind down.

LHH said it has been in active discussions with potential buyers in recent months, but no agreement had been reached as of Monday.

In conjunction with the bankruptcy filing, the hospital and its owners are seeking court approval of a $4.2 million debtor-in possession loan from MedCare Investment Fund V, LP, which will be used to fund continued payment of employee salaries and benefits through the wind-down period.

The financing is scheduled to mature on July 31.

Interest will accrue at a rate of 7½%.

LHH is seeking interim access to $1 million of the DIP loan.

The hospital said the funds are also intended to assist physicians in the near term as they transition to independent practice.

According to court documents, LHH has $10 million to $50 million in assets and $100 million to $500 million in debt.

No unsecured creditors were listed with claims of $1 million or more.

The hospital is represented by Young, Conaway, Stargatt & Taylor.

The Chapter 11 case number for the Lacombe, La.-based hospital is 17-10201.

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