L.A.'s Gardens Regional files for bankruptcy amid $30 million in debt

The Gardens Regional Hospital and Medical Center Inc., providers of healthcare to low-income individuals in Los Angeles, have filed for bankruptcy as they face $30 million in debt, reports the Wall Street Journal.

Since opening in 1997, the 137-bed hospital has served mostly low-income individuals in the surrounding communities of Hawaiian Gardens, Artesia, Bellflower, Cerritos, Lakewood, Long Beach, Norwalk and Paramount. It also provides more than $11 million in charitable care, community services and health professional education each year. Since 2010, state and federal medical insurance programs have cut down on reimbursement payments to the facility, which took in more than 8,500 emergency-room patients last year.

“The [hospital] is a vital part of Los Angeles County’s healthcare safety net, serving some of Southern California’s most medically vulnerable residents,” said board member David Herskovitz in court papers.

Herskovitz added that, since the implementation of the Affordable Care Act, more patients have access to healthcare, but the increase in insurance money wasn’t enough to offset the lower payments from government programs.

“This was grossly overshadowed by the annual loss of [federal Medicaid program] payments that had previously enabled the [hospital] to treat the local low-income population,” he said. “This population continues to be chronically underinsured or have insurance with high deductibles which they cannot afford to pay.”

A local construction management firm called Naerok Group International Inc. has agreed to provide a $2 million loan that would pay for the cost of the 332-worker hospital’s restructuring.