Humble Surgical Hospital files for bankruptcy
Humble Surgical Hospital filed for Chapter 11 bankruptcy protection Friday morning, three weeks after U.S. District Judge Lynn Hughes entered a multi-million judgment against the specialty, five-bed hospital.
Earlier this month, Aetna Life Insurance Co. was awarded $51.4 million, including nearly $10 million in interest, to recover excessive health care fees the insurer said it paid to the hospital during the past seven years.
It’s hard to operate when you have that kind of judgment against you, said Houston bankruptcy lawyer Edward L. Rothberg who is representing Humble Surgical. Without the judgment, the hospital was solvent, he said.
The hospital will remain open as Humble Surgical works its way through the bankruptcy proceedings, said Rothberg. But the longer term is murky.
“I can’t see them generating that kind of revenue to satisfy the judgment,” said Rothberg. The owners of the hospital may end up having to sell the facility, he said.
In its bankruptcy petition, Humble Surgical estimated its assets between $10 million and $50 million and liabilities between $50 million and $100 million.
Aetna did not have an immediate comment.
Aetna sued Humble Surgical Hospital in 2012, contending that the surgical center in Humble charged the giant health insurance company for procedures up to 10 times more than typical market rates. The hospital is not in Aetna’s managed care network, and Aetna accused the surgical center of attracting its patients by offering special discounts.
Typically, health care patients pay more when they use facilities and providers outside of a health insurance company’s managed care network. The higher costs are designed to encourage patients to use facilities that negotiated lower fees for service in exchange for increased patient volume.
Aetna alleged Humble Surgical charged its patients out-of-pocket fees similar to what in-network facilities would charge, but then the hospital billed Aetna for the procedures as an out-of-network provider.
The “sidebar deals” the surgical center made with patients as an inducement meant the surgical center received a “substantial windfall,” according to Aetna’s 2012 lawsuit.