Coping with closure. Consideration of legal issues in hospital closing can save precious time and considerable money

From the legal perspective, closing a hospital can be as difficult as opening one. Whether a hospital is closing or downsizing, it should become familiar with the relevant legal issues before the process begins and develop a strategy for addressing them. Hospitals planning to discontinue services often must give advance notice to federal, state, and local governmental agencies, as well as to nongovernmental organizations such as the Joint Commission on Accreditation of Healthcare Organizations and to contractors. Failure to notify the applicable state licensing agency may violate the hospital licensing act and subject the hospital and its officers and directors to statutory sanctions. A hospital must carefully consider the closure's effect on its medical staff. If the medical staff brings legal action, the law in many states and the hospital's own corporate and medical staff bylaws may provide some defenses. A major consideration in any closure is the procedures for dealing with employee issues such as termination rights and benefits, access to personnel files, unemployment compensation benefits, severance pay and notice, transfer privileges, posttermination obligations, bargaining unit issues, preferential hiring, and communications. A hospital closure will also trigger issues concerning Medicare and Medicaid reimbursement, debt instruments, Hill-Burton grants, bankruptcy, and Joint Commission accreditation. A good community communications program is essential to a smooth closure or downsizing. If the hospital does not explain why it must take the action, the community may misinterpret its motives and react with hostility, which can influence government agencies. The hospital might retain a professional public relations consultant, especially if the community is complex or has been hostile to the hospital in the past.