After receiving an additional $44 million in state and federal funds this year over last, Pipeline Health, the owner of West Suburban Medical Center in Oak Park and Chicago’s Weiss Hospital, is seeking further special funding from Springfield.

And according to multiple officials, Pipeline is linking receipt of more state funds to its ability to continue operating those hospitals.

It is uncertain if added state funding is possible, according to an August letter from the state to Pipeline obtained by Wednesday Journal. In a statement issued Sept. 4, a Pipeline spokesperson wrote, additional funding is “critical to our ability to continue to serve as a lifeline for the community.”

Oak Park Mayor Anan Abu-Taleb said Saturday that he has been talking with Jim Edwards, the California-based Pipeline CEO, and that while Edwards is appreciative of the added funding already received, more state funding is being directly linked to the company’s ability to remain viable.

“Yes, that is the way they talk about it with me,” said Abu-Taleb.

Don Harmon, Illinois State Senate president and an Oak Parker, said he remains “an advocate” for West Sub and that discussions are ongoing between the governor’s office and Pipeline. But he said the state is asking Pipeline to verify the total additional amount of funding it has already received during the pandemic before any further funding could be considered.

Harmon said Pipeline has told him that they are “committed to both hospitals and I take them at their word. Though the closing of Westlake is still fresh in people’s mind.”

Pipeline purchased three Chicago area hospitals from Tenet Healthcare in 2018 – West Sub, Weiss on the city’s north side and Westlake in Proviso Township. It promised to continue operating all three but reneged on that pledge and quickly closed Westlake.

State Rep. LaShawn K. Ford (D-8th) said he has been told the state has effectively ended discussions with Pipeline over additional funds.

“My understanding is that the hospital is reporting that they are so far in the hole and the governor has refused to help them with the money they need to stay open,” said Ford, who added he received that information from a lobbyist in Springfield.

Ford served on the board of West Suburban Medical Center, but he resigned after its acquisition by Pipeline Health.

In a Sept. 4 statement to Wednesday Journal, a spokesperson for Pipeline said the company is still in talks with Governor J.B. Pritzker and other elected officials seeking additional financial support.

Pipeline’s statement reads:

“We have been in discussions and continue to be with the Governor’s office and other elected officials about obtaining supplemental funding for services at West Suburban. As a safety net hospital serving an 85 percent African American and Hispanic patient population and with approximately 40 percent of our patients on Medicaid, this support is critical to our ability to continue to serve as a lifeline for the community. As the COVID-19 crisis continues to discriminately infect these historically underserved communities, supplemental funding could not come at a more critical time.”

The Pipeline statement for the first time identifies West Sub as a “safety net hospital,” an official designation allowing added state and federal funding. The mix of patients, largely what percentage are covered by Medicaid, distinguishes a safety net facility from a more typical community hospital.

 When contacted, Pipeline Health co-owner Eric E. Whitaker refused to comment on the status of West Suburban. Pipeline Chief Strategy Officer BJ Krech said he is “not aware of any pending closure of West Sub.”

“The only thing closing that I’m aware of with Oak Park hospitals is the closure of the skilled nursing unit at Rush Oak Park,” Krech said.

Krech said he’d been in discussions with Rush Oak Park on a potential collaboration between the two hospitals regarding care coordination as Rush, pending state approval, will transition that unit out of service.

Bruce Elegant, longtime head of Rush Oak Park, confirmed those discussions but called them exploratory and said “no formal arrangement” would follow. Rather, he said, West Sub might be added to the mix of discharge options its staff considers for Rush patients.

Ford raised questions about Pipeline’s plans.

“The question is, where is the commitment [from Pipeline]?” he asked. “Are they committed to being all about profit or are they about making sure they provide high-quality health care for the patients that they serve?”

Ford worries the impact the hospital’s possible closure will have on Chicago’s Austin neighborhood.

“This is devastating for the Austin community, because many gunshot victims go there,” Ford said.

“This big corporate organization has come in and bought hospitals in high-poverty areas or areas that serve high-needs patients with Medicaid and patients without insurance,” said Ford. “And they’ve closed them down.”

Ford compared Pipeline officials to venture capitalists, believing Pipeline acquired the three hospitals for the purpose of asset stripping.

“They’re those people that buy businesses and then they bankrupt them,” Ford said.

Dan Haley contributed to this report.

Westlake closing caused West Sub worries

The closure of Westlake Hospital immediately prompted worries that West Suburban would follow suit.

On Sept. 11, 2019, former Westlake employees filed a federal class-action lawsuit against Pipeline, claiming the company violated the Federal Worker Adjustment and Retraining Notification Act by not providing notice of termination to more than 500 Westlake employees at least 60 days in advance.

“Pipeline Health’s flagrant manipulation of the system endangers not only the former patients and employees of Westlake Hospital, but also everyone in the Chicago and Oak Park communities, especially those that currently rely on Weiss and West Suburban for health care and employment,” the lawsuit claimed.

The lawsuit also accused Pipeline of creating a shell company “for the sole purpose of acquiring — and then immediately closing — Westlake Hospital” as part of a strategy developed to benefit Pipeline’s investors, despite Pipeline officials telling the Illinois Health Facilities and Services Review Board that the Westlake would stay open for at least two years after the purchase.

A complaint filed Nov. 11, 2019, stated that Pipeline hospital had no interest in operating Westlake and decided to file for Chapter 7 bankruptcy instead of spending the money to run the hospital.

The class-action lawsuit is still pending, according to attorney Ari Scharg of Edelsen PC, who is representing the former Westlake employees.

The class-action lawsuit is just one in a string of lawsuits filed against Pipeline. After Pipeline reneged on the promise to keep Westlake open, the village of Melrose Park filed a state lawsuit on March 7, 2019 accusing the company of “fraud” and “conspiracy.”

The village of Melrose Park filed a second lawsuit against Illinois Health Facilities and Services Review Board and Pipeline, challenging the board’s decision to approve the closure of Westlake. Scharg represented Melrose Park in both cases. Pipeline agreed to pay the village of Melrose Park $1.5 million to settle the two lawsuits.

Scharg has represented parties with grievances against Pipeline in four different lawsuits, including the filing of two whistleblower cases, wherein Pipeline terminated the employment of people providing information about Westlake’s closure to Melrose Park.

The whistleblower cases were dismissed by agreement of the parties. Scharg has also represented five former Westlake employees in front of the National Labor Relations Board.

A closure of West Suburban Medical Center, Scharg said, would be “terrible.”

“Their whole thing with closing Westlake was that West Sub is so close and that there’s not going to be any absence of healthcare options in the area because of the proximity of West Sub,” Scharg told Wednesday Journal.

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