San Diego Hospice, the largest non-profit hospice in California and one of the largest in the nation, now seeking bankruptcy protection, may soon be combined with Scripps Health.
The four-hospital Scripps system on Wednesday sought bankruptcy court approval to rescue the organization. The hospice has been wrestling with a federal decision that it enrolled patients who weren't appropriately documented with terminal illness.
On Wednesday, SDH announced it would close.
Scripps is looking to acquire the assets of the 24-bed hillside acute care facility, which up until last fall took care of 900 patients at a time, most of them in their homes, with some 900 employees.
"I think there's a growing understanding of hospice care for society and it makes sense for us to have it within our system," says Scripps CEO Chris Van Gorder. "It's a sad day for San Diego Hospice, but I had doctors all over me suggesting that we step in and help. They just didn't know until today that we were doing just that."
Depending on the bankruptcy court's decision, he adds, "we will hire employees, many from San Diego Hospice, if they're interested in working with us, and I think many will be. And we will ramp up as patients sign up with us, and transition them over into our hospice."
Earlier this month, Van Gorder announced that Scripps had purchased the much smaller Horizon Hospice in suburban Poway, in essence giving Scripps a license to deliver hospice care. Van Gorder is careful to say that Scripps is not "purchasing" San Diego Hospice, because that would mean absorbing any debt and liability the hospice will owe CMS, "which we obviously can't do."
Clearly, however, Scripps would be positioning itself to provide many of the same services. Van Gorder adds that having a hospice within its continuum of care, something Scripps essentially lacks, makes sense for all sorts of reasons. "We are moving incrementally back into managed care, capitation, bundled payments—all those things," he says.
"We do believe we have to knit together this extremely fragmented delivery system and make more common sense out of cost, quality of care and continuity of care."
Last year, Centers for Medicare & Medicaid Services audits determined that San Diego Hospice was treating patients who did not have physician documentation that they would die in six months, in violation of CMS rules. Because of that, SDH faces the possibility that it must repay millions of dollars to the federal government in overpayments.
The audit result also forced San Diego Hospice to dramatically scale back, lay off some 400 employees and reduce patient census to 400, says Kathleen Pacurar, San Diego Hospice CEO. Many of the hospice's former patients are now being cared for by 18 other hospices around the county.
But with the bankruptcy court's approval, Van Gorder says, "we can make sure we can offer appropriate care based on the patient's desires and needs."
Scripps may also reap shared savings through bundled payment programs by owning a care delivery setting that replaces aggressive, futile care in hospital ICUs that many patients don't want or need, with comfort and pain-remediating care in their homes.
The deal includes Scripps' acquisition of San Diego Hospice's electronic medical record license and associated computer equipment.
Steve Escoboza, President and CEO of the Hospital Association of San Diego and Imperial County, says the Scripps move "goes toward what hospitals and other providers are trying to do, which is align themselves to have their own continuum of care. It's all about population health, the triple aim."
Escoboza adds, "bundled payment systems are the next big thing on the horizon. And those in the C-suite are thinking this way, to provide the full complement of services."