St. Margaret's Health is shuttering its 120-year-old Spring Valley hospital Friday, just months after the abrupt closure of its hospital in nearby Peru.
SMH president and CEO Tim Muntz pinned the blame solely on "one bank's actions on June 5, 2023." He told the Illinois Health Facilities and Services Review Board that the hospital's primary lender is cutting off access to their funds.
"The hospital's management must now direct its attention to ensure an orderly wind-down, including transferring any inpatients, advising patients of where they may seek continuing care and providing patients access to copies of their medical records," Muntz wrote. "The hospital has developed a wind-down plan to ensure the closing is handled appropriately and the appropriate notifications are made."
The hospital asked last month for state financial help to ward off closure, but the governor's administration and legislative leaders were concerned that the money wouldn't be used for its intended purpose.
"This skepticism unfortunately appears to have been warranted after the advanced payment from OSF, which we were assured would be used for payroll, was used to pay off debts owed to their financial bank," said state Sen. Sue Rezin (R-Morris) and state Rep. Lance Yednock (D-Ottawa) in a joint statement.
Questions submitted to the governor's office didn't immediately receive responses.
SMH sought to have St. Margaret's designated as a rural emergency hospital under a new Medicare classification. The hospital's leadership said that would have enabled the hospital to recoup enhanced Medicare reimbursements for services rendered and remain solvent.
Rezin and Yednock said they tried to help SMH get that designation, and also worked to get $6 million worth of Medicaid reimbursements released earlier than usual in an attempt to help the flagging hospital system maintain services.
OSF HealthCare plans to acquire the Peru hospital and restore emergency services, but has no plans to take on ownership of Spring Valley. Lawmakers say they're working to expedite the Peru facility's reopening under the new ownership.
OSF HealthCare spokesperson Shelli Dankoff said in a statement that the Peoria-based health care system is "saddened" by the news of the Spring Valley hospital's closure.
"We are determining how best to provide necessary services to the Illinois Valley, but this process, along with the necessary regulatory approvals, takes time," she said, noting that OSF HealthCare has completed the first phase of its purchase of the Midtown Plaza complex, Midtown Health Center, and Granville clinic as part of its plan to reopen some of the former SMH properties.
In a statement, Spring Valley Mayor Melanie Malooley-Thompson said SMH decided on the hospital's fate, and said the city wasn't given prior notice of the decision or an opportunity to work with them to find a different solution.
"The hospital closure will have a profound impact on the well-being of our community. This will be a challenging transition for many residents who rely on our hospital for quality healthcare," she said.
Access to OB/GYN services remains a particular concern in the Illinois Valley. With the closure of St. Margaret's in Peru, the nearest places to access those services is in Ottawa and Morris. OSF HealthCare recently announced another delivery unit at the hospital in Pontiac is also closing.
