Brownsville Tri-County Hospital forced to close again

Bedsheets that once covered patients at Brownsville Tri-County Hospital in Fayette County now blanket signs at the entrance.

The financially troubled 40-bed hospital, resurrected in July by a community group after closing in 2006, shut down again Thursday.

Directors voted Wednesday to surrender the hospital's operating license to the state, said attorney John Vetica. He represents the Brownsville Property Corp., which owns the building and land.

Board member Ray Koffler of Brownsville said the 15 patients would be transferred by 7 p.m. yesterday.

"I'm disappointed. What are you going to say?" Koffler said. "If I have anything to do with it, we're not giving up the license. Hopefully, we can work our way out of this."

Hospital officials went to Harrisburg on Tuesday to plead for help from the Rendell administration but returned empty-handed.

Stacy Kriedman, a spokeswoman for the state Department of Health, said her office is working on a closure plan with hospital officials. State officials will ensure that drugs, equipment and patient medical records are secure.

"The most important thing is to safely transfer patients in the hospital to other facilities," Kriedman said. "Our goal is that patients are protected and cared for."

PennDOT will remove the blue "H" signs that direct motorists to the hospital. Until the signs are removed, the hospital will accept walk-in emergency patients.

Brownsville has assets of more than $1.2 million but liabilities of more than $14.3 million, according to a financial report filed in December in U.S. Bankruptcy Court.

The Brownsville Property Corp. won a battle in bankruptcy court yesterday, but victory came too late to keep the struggling hospital open.

Chief U.S. Bankruptcy Judge M. Bruce McCullough granted Brownsville Property Corp. its request for an injunction that prevents foreclosure by trustee Robert Bernstein.

McCullough said the injunction would remain in place until attorneys for Presidential Healthcare Credit Corp. of San Antonio appear in bankruptcy court. If Presidential Healthcare defies a court order to appear, McCullough said he would fine the company and cancel its mortgage.

Presidential Healthcare filed for a mortgage on the hospital property in December after providing $2.5 million in short-term financing to give the hospital a steady cash flow while it gets money it is owed.

McCullough did not rule on the validity of Bernstein's claim that Brownsville Property defaulted by permitting Presidential Healthcare to file for a mortgage in Fayette County Court, in apparent violation of a $2 million settlement with Bernstein on the hospital's debts from its January 2006 bankruptcy.

Vetica said the hospital board did not know that its former chief executive, James H. Burnette, signed a mortgage last year in favor of Presidential Healthcare. Burnette has since left that job, Vetica said. Presidential Healthcare did not inform the hospital board it was filing the mortgage, he said.

Presidential Healthcare has not responded to requests to subrogate its mortgage to the hospital, Vetica said.

Bernstein said after the hearing that of the $2 million settlement reached with Brownsville Property, about $900,000 is money due to former nurses and other employees when the hospital filed for bankruptcy three years ago.

If the judge were to grant Bernstein the right to foreclose on the hospital property, a sale for $6 million would not cover all debts owed by Brownsville General Hospital, Bernstein said. Parkvale Bank has $1.25 million in mortgages it filed against the property in 2007.

The 93-year-old hospital in Redstone closed in 2006 when the then-operators surrendered the license to the state after financial problems and a labor dispute. After board members and volunteers waged an effort to reopen the facility, Brownsville General Hospital reopened in July as Brownsville Tri-County Hospital.

But the new facility could not shake the financial problems that have plagued it for years. Its demise comes at a time when Pennsylvania hospitals are facing serious financial problems from a decline in admissions and insurance reimbursements and worsening returns on investments, which many institutions relied on to stabilize finances.