Drexel files lawsuit to prevent possible closing of Hahnemann

By John George  – Senior Reporter, Philadelphia Business Journal

Jun 24, 2019, 2:44pm EDT

Drexel University has gone to court in an effort to prevent American Academic Health System from closing Hahnemann University — an action the AAHS said earlier this year was a possibility because of the Center City medical center's mounting financial losses.

News of the lawsuit was first reported on inquirer.com

Drexel is also seeking $13 million it claims to be owed by AAHS for services Drexel physicians performed at Hahnemann.

Earlier this year, AAHS President and CEO Joel Freedman said the California-based health system may be left with no option but to close Hahnemann, where losses were averaging between $3 million and $5 million per month.

AAHS cut 175 jobs at Hahnemann in April. In an interview that month Freedman told the Philadelphia Business Journal the hospital's long-term viability will require additional state support and improved payment rates from private health insurers.

In its lawsuit, Drexel stated the closing of Hahnemann would “greatly disrupt" the city's health care community.

Asked about the lawsuit, AAHS issued a statement that read: “The defendants are reviewing the allegations in the complaint, and while we generally do not comment on pending litigation, We can say without hesitation that PAHS and Joel Freedman have at all times acted with the best interests of the hospitals and our patients at heart. We believe the allegations are without merit and we intend to vigorously defend against them.”

AAHS acquired Hahnemann University Hospital and St. Christopher's Hospital for Children from Tenet Healthcare Corp. in January 2018 for $170 million.

Earlier this year, Drexel University and Reading-based Tower Health — which operates five hospitals in southeastern Pennsylvania — signed a letter of intent to explore combining physician practice plans.

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