Lawmakers call for probe of Alecto
CHARLESTON — The West Virginia House of Delegates wants Attorney General Patrick Morrisey to investigate the company behind the closure of the Ohio Valley Medical Center in Wheeling and the impending closure of the Fairmont Regional Medical Center.
The House, Thursday, adopted House Resolution 13, calling on the Attorney General’s Office to investigate the business practices of California-based Alecto Healthcare Services, the owners of Ohio Valley and Fairmont Regional medical centers. The resolution had the support of 95 delegates, with four delegates voting no, one being Delegate Patrick McGeehan, R-Hancock, a Northern Panhandle delegate.
“The House of Delegates calls upon the Attorney General to immediately investigate the business practices of Alecto and determine whether it has violated state laws,” the resolution stated.
Alecto announced Tuesday that Fairmont Regional would close in 60 days, putting more than 600 employees out of work. The company purchased the medical center in 2014 for $15.3 million.
According to the certificate of need for the hospital, Alecto projected Fairmont Regional would turn around a $733,000 deficit in 2014 to an $8.2 million profit by 2017.
The announcement of Fairmont Regional’s impending closure comes six months after Alecto closed the doors on OVMC and East Ohio Regional Hospital in Martins Ferry, Ohio, on Sept. 3. Alecto acquired both hospitals in 2017 for $40 million with the city of Wheeling contributing $3 million for capital repairs and for demolishing nearby buildings.
Two years later, 736 employees at Ohio Valley and 343 employees at East Ohio lost their jobs.
Delegate Erikka Storch, R-Ohio, is the lead sponsor of HR 13. Storch, who also is president of the Wheeling Area Chamber of Commerce, said Alecto is using the same playbook for Fairmont Regional that it used on Ohio Valley.
“We just want to find out if there have been any laws broken, and if so, take appropriate action,” Storch said. “It is the same playbook, the same plays, and the same fourth quarter. It just seems to be a repeat of what they’ve already done. It sounds like they’ve done some similar type acts in other states as well.”
Antelope Valley Hospital in Lancaster, Calif., sued Alecto in 2017 for $30 million, accusing Alecto of malfeasance and fraud when the company managed the hospital from 2015 to 2016. Storch said there is much regret in the Ohio Valley for dealing with Alecto.
“Unfortunately with hindsight being 20/20…we thought it was for the better for the community, but it’s only created issues, problems, and unintended consequences for citizens,” Storch said.
Curtis Johnson, press secretary for the Attorney General’s Office, said in a statement they would review the resolution.
“We look forward to discussing this proposed resolution with the Legislature,” Johnson said. “Every entity in the state must comply with our laws.”
Last September, the Attorney General’s Office released a statement about Ohio Valley after Gov. Jim Justice called for investigation of the Ohio Valley and East Ohio closings.
“Attorney General Morrisey shares the governor’s concern about the abrupt closure of Ohio Valley Medical Center and its negative impact on health care and employment in the state’s Northern Panhandle,” Johnson said. “Our office is looking closely at this issue and exploring every possible legal avenue to try to protect jobs and consumers’ access to health care.”
In a statement earlier this week, Justice said he was working with Senate Minority Leader Roman Prezioso, D-Marion, and meeting with Fairmont Regional administrators Thursday to determine the next steps for the hospital and employees.
“Fairmont Regional Medical Center is a vital lifeline to our people in the Fairmont community and those across Marion County,” Justice said. “My administration has been studying various options over the past several months and meeting with delegates, senators, and other community leaders to try to find a workable solution.”
The Fairmont Regional announcement is the second announcement this month of a hospital cutting back services in West Virginia. Pleasant Valley Hospital in Point Pleasant announced last week that it eliminated 43 full-time positions and is eliminating its obstetrics services.
Thomas Health System — which owns two hospitals in the Charleston area — announced in January it was seeking Chapter 11 bankruptcy.
Justice created a Rural Medicine Task Force Feb. 5 to develop solutions to prevent community hospitals from closing.
“We must stop our rural hospitals from closing,” Justice said. “I intend to bring together all the major hospitals and all the leading players to work on this issue. They have the expertise necessary to develop solutions for solving the delivery of rural medicine and care in West Virginia.
“Maintaining hospital and emergency care services for our citizens is an extremely high priority of mine and that’s why I am forming this task force to find ways to stop the closure of our community hospitals,” Justice said.
According to a report released Feb. 11 by the Chartis Center for Rural Health based in Illinois, 450 rural hospitals across the U.S. are at risk of closure.
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