Bankruptcy hearing on sale of Hahnemann’s residency program postponed, emergency room officially closed

The bankruptcy hearing scheduled for Monday on the proposed $55 million sale of Hahnemann University Hospital’s residency program has been postponed until Sept. 4.

A U.S. Department of Justice attorney representing the Centers for Medicare and Medicaid Services (CMS) asked for the delay, a Hahnemann spokesperson said. The agency provides the money to pay the more than 550 doctors-in-training originally assigned to Hahnemann, who have scattered to other hospitals.

Hahnemann officials asked for a meeting with CMS representatives on the proposed sale. The would-be buyers — a coalition of six Philadelphia-area health systems — are also expected to be represented at that meeting, which is set for Wednesday.

CMS objected to the sale on Aug. 5 in the strongest terms, saying it was “contrary to law and contravenes CMS regulations.” That’s because it limits to $3 million the amount Medicare could recoup for overpayments at Hahnemann since Joel Freedman bought the hospital in January 2018. The deal also amounts to an illegal transfer of a Medicare provider agreement, CMS said.

Neither CMS nor Hahnemann officials, nor representatives of the would-be buyers of the residency program, responded Friday to requests for comment.

The delay and the meeting happen as two companies from California and Michigan say they want to buy the hospital to reopen it — one offered $60 million — rather than allowing it to close, as would happen under the sale to the coalition.

The coalition members are Christiana Care Health System, Cooper University Health Care, Einstein Healthcare Network, Main Line Health, Jefferson Health, and Temple University Health System. They now employ 264 of the former Hahnemann residents.

CMS pays for a limited number of residents at teaching hospitals, but hospitals are allowed to take on additional residents. In aggregate, the coalition members have 300 more residents than allowed under their caps, which means they pay the residents themselves, according to the latest federal data. Cooper and Jefferson accounted for more than 200 of the surplus residents.

The two systems did not answer questions about whether they would use the acquired Hahnemann residency slots, if the sale goes through, to expand their total number of residents, or if they would substitute the acquired slots, which would be funded by Medicare, for those they are paying out of their own pockets.

Hahnemann has been closing in stages. It discharged its last inpatient on July 26. Its emergency department officially closed Friday, though last month the hospital stopped admitting patients treated at the department. The only remaining doctors are in the outpatient oncology office, a Hahnemann spokesperson said.

The official closure date is Sept. 6.

Staff writer Stacey Burling contributed to this article.