After years of financial difficulty, including the inheritance of substantial legacy debt, on December 2, 2012, Interfaith Medical Center (“IMC”) filed a voluntary petition in the United States Bankruptcy Court for the Eastern District of New York commencing a Chapter 11 bankruptcy case.
- IMC’s financial difficulties continued during the Chapter 11 case and in mid-2013, after several failed attempts to develop a working Plan of Reorganization with the consent of the Department of Health (“DOH”), IMC prepared a plan of closure.
- Following the filing of several amended plans of closure, at the end of 2013 the Bankruptcy Court ordered the interested parties, including the Dormitory Authority of the State of New York (“DASNY”) and the DOH, to mediation to determine the future of the hospital.
- Recognizing the continued need for IMC as a safety-net hospital, DOH ultimately decided, commensurate with the arrival of Federal funding, to support and to subsidize IMC's continued operations.
- IMC exited its Chapter 11 case on June 19, 2014, when its Second Amended Plan of Reorganization became effective.
- As part of the Plan of Reorganization to exit bankruptcy, a Temporary Operator was appointed by the New York DOH, and Steven Korf, Senior Managing Director of ToneyKorf, was asked to serve as IMC’s Interim President and CEO.
Execution and Results
- Recruited a new management team and immediately focused their efforts and attention on the following:
- Identifying and implementing initiatives to increase revenue and reduce costs.
- Taking actions to improve the quality and delivery of health services and address deficiencies in hospital practice and policy identified by the DOH, Office of Mental Health, CMS, other regulatory agencies, and IMC’s accreditation agency, The Joint Commission (“TJC”).
- Re-engaged with the community and employees in order to improve relationships in support of addressing employment, DSRIP and regulatory issues confronting the hospital.
- Stabilized operations and finances by replenishing key leadership roles lost during potential hospital closure, tending to facility maintenance, enhancing patient experience, and controlling costs.
- Reinvigorated the institution for growth through (i) prioritized and phased IMC-specific initiatives developed to enhance access to care and efficiency of existing fiscal practices, and (ii) coordination with DSRIP partners.
- The implementation of the Transformation Plan provided increased access to medical care for the local community, while improving financial and operational performance, and providing jobs and long-term opportunities for key stakeholders, and a potential new direction for IMC.
- Expanded residency programs, including dental, general practice, pediatric, ophthalmology, anesthesia, surgery and psychiatry; each residency position is funded and therefore provides increased revenue for the hospital.
- Increased unavoidable admits through Emergency Department by seeking and gaining approval from FDNY for IMC branded ambulance to show presence in community and increase runs.
- Increased Ambulatory Surgery through expansion of orthopedic and general surgery services.
- Increased Catheterization Lab cases through commitments from affiliated physicians to bring more outside patients to IMC.
- Increased Dental Program revenue due to growth in services at new site, increased surgical procedures, and additional associated revenue from residents.
- Developed and implemented a Physician Compensation Program, which created a larger physician pool, with the ability to participate/achieve better quality bonus rewards, and more Part B billings.
- Continued efforts in increasing rate of return in denial management, working with outside company to use legal and contingency based approach.
- Increased capitated revenue and quality bonuses through better management of patient rosters and quality monitoring to achieve bonus and full capitated returns.
- Negotiated new payor contracts with insurance providers, such as Aetna, Cigna, and others.
- Identified, developed and implemented a program to streamline and improve the revenue cycle process.
- Identified a 340B retail pharmacy program to service inpatient discharge and outpatient needs at hospital and clinics.
- As a result of these and other efforts, CMS’s Hospital Compare Program awarded IMC a second star, rated IMC the second best performing hospital in all of Brooklyn based on Total Performance Scores and the second best performing hospital in all of New York City for Hospital Acquired Conditions.
- While many of these efforts are continuing, IMC’s operating performance improved substantially and Interfaith is now well positioned to be a strong partner with other health care institutions through the DSRIP Program.
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