Harrison County

Memorial psychiatric hospital losing millions; sale imminent

A feasibility study conducted by accounting firm Horne LLP concludes that Memorial Behavioral Health should be sold. The board of Memorial Hospital at Gulfport is asking for a public hearing on the proposal.
A feasibility study conducted by accounting firm Horne LLP concludes that Memorial Behavioral Health should be sold. The board of Memorial Hospital at Gulfport is asking for a public hearing on the proposal. ttisbell@sunherald.com File

Memorial Hospital at Gulfport is moving ahead with plans to sell its psychiatric hospital, Memorial Behavioral Health, on U.S. 49 in Orange Grove.

Harrison County and the city of Gulfport have agreed to schedule a public hearing for 1:30 p.m. Dec. 20 at Gulfport City Hall on the proposed sale of the 89-bed hospital that provides acute psychiatric care. State law requires the hearing because the city and county own the hospital.

Accounting firm Horne LLP studied the feasibility of a sale and recommended it. The study has not been released, but Memorial summarized key points in a document shared with the council.

The document says:

▪  Operating losses at the hospital have ranged from $3.7 million to $4.8 million per year since 2013, when the state changed Medicaid rules.

▪  66 percent of patients are eligible for Medicaid.

▪  MBH lacks the regional scale to survive an economic downturn.

But the big issue for Memorial has been Medicaid payments, CEO Gary Marchand said.

“Our losses are due to the Medicaid payment model and the way it differentiates between a public and private hospital,” he told the Sun Herald on Tuesday.

Community hospitals, including Memorial and Singing River Health System in Pascagoula, do not qualify for daily Medicaid payments that private, free-standing hospitals receive. Memorial and SRHS are challenging the state Division of Medicaid’s payment system, saying state law requires that hospitals be compensated based on actual costs, which is not happening.

Marchand says a private company could recover its costs operating the psychiatric hospital. He said the hospital is discussing a sale with “multiple interested parties.”

Memorial hopes to have a new owner in place April 1, he said. The new owner would be required to accept Medicaid and Medicare patients. Memorial plans to operate the hospital until the new owner steps in, preserving jobs and community services, Marchand said.

A sale, he said, is the best way to assure continued psychiatric services.

He said, “We’re not going to move any quicker than we should to get the best result so that the community wins.”

Anita Lee: 228-896-2331, @calee99

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