Can an insurance company get a hospital closed down?

[CaliforniaPeggy]

My husband and I were discussing this over dinner tonight.

We remember a small local hospital that was not seen as a "full service" hospital by insurance carriers. My husband feels strongly that this designation led to the hospital closing.

It was a major paramedic destination. And even after the hospital started having OB/GYN services, the patient population continued to drop.

They also didn't have cardiac surgery while two other larger area hospitals did.

So, I'm wondering: Was the lack of insurance support pivotal?

[madinmaryland]

1. I imagine that the Health Insurance Cartel (HIC) can do whatever they

want to. The worst is probably yet to come.

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[pinto]

2. Did they withhold / refuse coverage for the services that *were* available?

:hi:

[CaliforniaPeggy]

3. It was a long time ago, but I think they did do that sort of thing...

:hi:

[Maine_Nurse]

4. It probably shouldn't be able to happen but...

in reality it could. Health insurance companies can refuse to pay (or more often require a much larger patient co-pay/deductible) for services wherever they want to, forcing their clients to use "preferred providers". If enough ensurers won't fully pay the facility, then less patients will used them and they could be forced to close.

This is part of the reason why CMS pays tiny Critical Access Hospitals a higher reimbursement rate--so that these smaller hospitals can stay afloat and serve their local areas.

In a somewhat related trend, we are seeing more and more insurance companies sending patients out of state or even out of the country to have procedures performed less expensively.

[CaliforniaPeggy]

5. Seems to me that this is what happened.

And with two much larger, much better equipped hospitals in the area, the competition was too great.

Thanks for your explanation.

:hi: