For those who remember the demise of Galesburg’s Cottage Hospital, it’s a familiar story — massive layoffs, a dwindling census, and loss of Medicaid and Medicare participation due to numerous patient care violations, followed by bankruptcy filings.
Very similar dominoes are now falling for Pontiac General Hospital, a troubled Michigan facility whose CEO is Sanyam Sharma — the son of former Cottage owner and CEO Sanjay Sharma.
The Sharma family bought the former Doctors’ Hospital in Pontiac, Mich., out of its previous owner’s bankruptcy, in 2016. That was four years before they bought Cottage out of then-owner Quorum Health’s bankruptcy, and a hospital in Berwick, Pa., that was run by Priyam Sharma and closed in 2022.
The Sharmas quickly changed the name of their Michigan facility back to the original Pontiac General Hospital and named Sanyam, then 24, the chairman and CEO.
Within a few years, the Sharma family looked to triple the number of beds in its profitable psychiatric unit, according to Crain’s Detroit Business.
In May of this year, the Centers for Medicare & Medicaid Services conducted an unannounced survey of Pontiac General Hospital in response to three complaints. At the time, there were around 100 patients receiving care in the 300-bed facility.
Pontiac General Hospital was then placed in Immediate Jeopardy, the federal designation for a crisis situation in which the health and safety of patients are at risk. Cottage Hospital was also placed in Immediate Jeopardy following CMS inspections in late 2021, before shutting its doors in early 2022.
According to CMS reports, investigators found Pontiac General Hospital out of compliance in multiple areas, including failure to obtain informed consent; failure to provide care in a safe setting; failure to protect patients from abuse; and failure to recognize and report death in restraints.
The hospital submitted a plan of correction and was taken out of Immediate Jeopardy.
But six months later, on Nov. 15, the hospital issued a WARN notice that it was laying off hundreds of employees after learning it would lose Medicare and Medicaid participation, saying the hospital “did not reasonably foresee this event.”
That's as CMS issued a public notice that the Medicare agreement with Pontiac General Hospital would be terminated Nov. 24 due to violations including staffing, patient rights, and governing body — all areas that also led to the termination of the Medicare agreement with Galesburg’s Cottage Hospital in 2021.
And on Nov. 23, Pontiac General Hospital, through the legal entity Oakland Physicians Medical Center LLC, filed for chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Michigan.
The bankruptcy case for Cottage Hospital's affiliated clinics was also filed and settled there, as Michigan was the principal place of business for Cottage’s operations after the hospital closed its doors in Illinois.
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