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Judge lets D.C. back out of United Medical Center takeover plan

By Ann E. Marimow
Washington Post Staff Writer
Friday, May 14, 2010; B02

A D.C. Superior Court judge signed off Thursday on Mayor Adrian M. Fenty's request to abandon plans to seize control of the city's troubled United Medical Center, the only hospital east of the Anacostia River.

City officials initially asked the court to formally grant them control of the medical center, formerly known as Greater Southeast Community Hospital, citing fiscal mismanagement by its owner, Specialty Hospital of Washington. But the District changed course this month, calling the court-ordered approach too costly and dropping it.

In his ruling, Judge Henry F. Greene said that it was within the mayor's discretion to decide whether to pursue so-called receivership and that "it is not for the judicial branch to second-guess that decision."

Attorney General Peter Nickles said the District is developing alternative approaches to shoring up the hospital, which is owned by the city and the private, for-profit company.

"We will do whatever is necessary to save the hospital, to make it a first-class hospital and to protect our investment," Nickles said.

In its court filing, the city says that the hospital owes millions in unpaid electrical bills, taxes and payments to employee retirement plans and that it has been losing about $1 million a month.

Specialty officials have attributed its troubles to the District's failure to fully reimburse the cost of Medicaid patients at the safety-net hospital.

"This is not about quality of care," said Jim Rappaport, a co-founder of Specialty. "This is all about the District not having paid the cost for patients." Nickles said the city is seeking to raise reimbursement rates to cover as much as 100 percent of Medicaid expenses.

Separately, Rappaport said that the city is trying to pressure Specialty to turn over a 120-bed nursing care facility run independently within the hospital.

Negotiations between the parties continue, and Rappaport said the company has long suggested shifting the center to a nonprofit form of ownership.

In a deal worked out in 2007, Specialty and the city agreed to co-own the facility and for it to be managed by its own board. The District has invested about $100 million in taxpayer funds to modernize it in the past 2 1/2 years, and city officials and the company say quality has improved.

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