New Mexico’s attorney general on Tuesday announced an investigation into Memorial Medical Center, the Las Cruces hospital operated by Lifepoint Health, to determine whether the facility, highlighted in a recent NBC News report, violated state laws by turning away indigent and low-income patients seeking care.
Attorney General Raul Torrez said his office is reviewing Memorial's patient policies for compliance with a state law and the hospital's performance under a New Mexico statute governing the provision of care to needy patients.
At the news conference announcing the investigation Tuesday, Torrez said he had just met with Memorial patients and providers to discuss their concerns.
“It is evident to me that the management of this facility has failed to place the well-being, safety and care of its patients in the proper place and priority,” he said. “It is evident to me that decisions have been made from a standpoint that appears to be motivated by profit, by maximizing the bottom line and without due respect and consideration for the patients in their care.” He also warned the hospital's management not to retaliate against anyone who speaks openly about its practices.
An NBC News report last month described allegations that Memorial Medical Center turned away cancer patients under its operator, Lifepoint Health, which was acquired by Apollo Global Management, the New York-based private equity firm. Medical records and interviews with 13 patients detailed denials of care by the hospital or demands for upfront payments to secure treatments.
Barbara Quarrell, a former Memorial nurse, is a patient who said the hospital denied her care after she was diagnosed with cancer in 2022. She told her story in the attorney general's announcement.
Quarrell told NBC News she is encouraged by the attorney general's investigation. “It's about time,” she said. “At Memorial, it's all about the money; it's not about the patients anymore. Why are they in the health care industry if it's not about the patients?”
In a statement, a hospital spokeswoman said: “Memorial Medical Center was shocked to learn of this investigation from Attorney General Torrez during his press conference today. We remain committed to expanding access to care and being a good community partner in Las Cruces and Doña Ana County and will fully cooperate with this investigation.”
Before the report was published and broadcast in June, Memorial told NBC News that it does not deny care, but two of its top officials called to apologize to two patients who had told NBC News they were turned away.
An Apollo spokeswoman did not respond to an email seeking comment.
Lifepoint Health, the operator of Memorial, oversees the nation’s largest chain of mostly rural hospitals — 62 acute-care centers in 16 states. Lifepoint is the subject of two U.S. Senate investigations, along with other private equity-owned health care companies, NBC News reported. The probes are aimed at assessing what profits Apollo and other companies made in the deals and whether they harmed patients and doctors. Apollo has said it is cooperating with the investigations.
Although Lifepoint manages Memorial, the facility and the land on which it sits are owned by the city of Las Cruces and Doña Ana County. Denying care to patients could violate the 40-year lease Memorial signed with the county and city in 2004. The lease says the facility must continue to provide care to “those who are unable to pay the full cost of the health care services provided to them.”
About 225,000 people live in Doña Ana County, the urban and rural region Memorial serves, and nearly 15 percent are uninsured, recent census figures show. About 23 percent of county residents live in poverty, compared with 11.5 percent nationally.
One of the central points of the state investigation, Torrez said, is whether Memorial misrepresented its health care services to needy patients. The hospital's most recent annual report to the community said, “Providing care to all of our neighbors, regardless of their ability to pay, is central to our mission and our commitment to our community.”
Torrez is also investigating whether Memorial violated a New Mexico law governing patient financial assistance programs. The Patient Debt Collection Protection Act requires hospitals to conduct an assessment for financial assistance, she said, adding that “patients being turned away without an assessment would be a violation of the law.” Some of the patients interviewed by NBC News for the June report described how they were denied care without being assessed to determine whether they could use financial assistance.
Before 2004, Memorial operated as a nonprofit community hospital. Under Lifepoint, Memorial is a for-profit and highly profitable entity. It charged 6.7 times its costs for care in 2021, according to the most recent figures available from the Centers for Medicare and Medicaid Services, or CMS. The average for-profit hospitals nationwide charge is less than five times their costs, according to Ge Bai, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health, which is based in Washington, D.C.
CMS's Hospital Compare site confirms that Memorial's Medicare costs per beneficiary are higher than the national average and nearly 20% higher than the state average.
Yolanda Diaz is a patient advocate at CARE Las Cruces, a nonprofit she founded that helps patients in need pay for medical care and expenses. Diaz has been notifying county and city officials since 2021 that Memorial was turning away patients, a practice she said she considered inhumane and unfair.
“I was disappointed that no one in Las Cruces and Doña Ana County has stepped forward to take the necessary steps, but I was hopeful,” Diaz said in an email. “I believe that the New Mexico Department of Justice launching an official investigation is the best way to proceed and I look forward to the revelations being made public, the necessary changes being made and justice being served.”
Hospital documents submitted under open records requests show that Memorial’s written indigent care policy for years required it to provide care to patients who could not afford to pay the full cost of their treatments and discussed discounts or cost-sharing arrangements for people who met income criteria. That changed last year, five years later. after Apollo, the private equity giant co-founded by Leon Black, bought Lifepoint, records show.
In recent years, private equity firms like Apollo have taken over much of the health care industry. Typically, the companies saddle the companies they buy with debt and then cut costs to boost profits and attract potential buyers down the road. Nearly a quarter of New Mexico’s hospitals are controlled by private equity firms, according to a study by the Private Equity Stakeholder Project, a nonprofit that analyzes the private equity industry’s impact on consumers.
The American Investment Council, the private equity lobbying group, says the industry improves health care. But independent academic studies show that private equity firms’ involvement in the industry results in significant cost increases for patients and payers, such as Medicare. Research shows that lower quality of care has been associated with the firms’ investments in health care, including 10% higher mortality rates in private equity-owned nursing homes and more incidents of infections, blood clots and falls in hospitals.
