Pennsylvania rejects former Cottage owner's plans to shutter another hospital

Ellery Jones
Galesburg Register-Mail

The Pennsylvania Department of Health has rejected a plan from the former owners of Galesburg Cottage Hospital to close a hospital in Berwick, Pennsylvania.

The rejected plan, first reported by Scranton television station WNEP, would’ve turned Berwick Hospital Center into a psychiatric facility following a 90-day waiting period. The hospital and associated clinics were bought by Priyam Sharma in 2020.

Sharma is married to Sanjay Sharma, who purchased Cottage also in 2020. Cottage suddenly closed in January after the federal government said it would cut off Medicaid and Medicare payments over patient safety concerns.

The Pennsylvania Department of Health rejected Priyam Sharma’s plans for Berwick, the only hospital in the town of about 10,000, because it “was lacking necessary information to provide for an orderly wind down of acute care services,” according to a statement from the department.

“The hospital has been directed to resubmit a more complete plan which includes a comprehensive approach to move toward termination of its acute care hospital license,” spokesperson Mark O’Neill said in an email to The Register-Mail.

O’Neill said they expect a revised plan will be filed.

More:Former Cottage Hospital owners close Pennsylvania clinics; hospital closing in 90 days

The hospital has seen its revenue drop significantly in recent years. According to a report from the Pennsylvania Health Care Cost Containment Council, its net patient revenue fell from $51 million in fiscal year 2018 to just $22 million in fiscal year 2021.

Berwick Clinic Company LLC has already closed six of seven clinics associated with the hospital, which provided services ranging from primary care to pain management.

The company filed for bankruptcy on July 18. The clinics closed without any notice to patients and medical providers five days later.

The only remaining clinic, the Vascular Clinic, is “overwhelmed” with calls, according to a patient care ombudsman’s report filed in federal bankruptcy court on Friday.

The closure left an estimated 5,000 patients without providers, ombudsman Deborah Fish said. Most patients found out about the closure through the news or social media.

“The quality of patient care provided to patients of the debtor has declined significantly or is otherwise being materially compromised since the filing,” Fish wrote. “The Debtor is not delivering services to the vast majority of its patient population.”

One patient told the ombudsman that her disability insurance might not be renewed if she can’t get in to see a doctor this week. Another said her mastectomy scheduled for August at the hospital was cancelled after her doctor was fired.

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Cottage Clinics faced a massive medical records backlog when it declared bankruptcy on Jan. 3, a few days before Cottage closed. When the patient care ombudsman filed her first report in mid-March, they still had a backlog of over 1,500 records requests.

The Sharma family owns another hospital, Pontiac General Hospital in Pontiac, Michigan, which is still operating. That hospital is run by Sanyam Sharma, Priyam and Sanjay's son, through a holding company called Sant Partners.

Cottage was owned through holding company SBJ Group, and Berwick is owned through Fayette Holdings. Bankruptcy filings for both the Berwick and Cottage clinics list the Sharma’s home in Bloomfield Hills, Michigan as their primary place of business.

Fish said she will visit Berwick clinic sites this week and meet with employees. The company was due to file more information about its financial status on Monday.