Virginia Hospital Closing

PENNINGTON GAP — Lee Regional Medical Center will cease operations on Oct. 1 because of reimbursement cuts associated with Obamacare, extremely low community use of the hospital and a lack of consistent physician coverage, Wellmont Health System announced Wednesday.

The 70-bed facility has operated in Pennington Gap, Va., for more than 70 years, and had joined Wellmont in 2007.

“We had certainly hoped Lee Regional could remain open as a hospital and continue serving the community, but the difficult realities facing our facility are too much to overcome,” Fred Pelle, the hospital’s interim president, said in a prepared release. “We remain committed to serving the health needs of people who live and work in Lee County and will assist them in whatever way possible in this transition.”

Wellmont said the closure is due in part to major cuts in Medicare reimbursements by the federal government associated with Obamacare and a lack of Medicaid expansion by the commonwealth of Virginia. Another factor is the additional two percent cut in Medicare reimbursements enacted because of the federal sequester, according to Wellmont.

Wellmont said more than 60 percent of the hospital’s payments comes from federal and state programs.
Virginia has put Medicaid expansion in the hands of a commission consisting of delegates and senators but has reached no conclusion.

Wellmont said another matter affecting Lee Regional’s ability to continue as a hospital is finding physicians to take call coverage at the hospital.

Wellmont also said the hospital has experienced financial challenges due to a decrease in the number of patients in an economically distressed community obtaining care at the hospital. The hospital made several changes to respond to changing patient needs and reduced revenue, including reducing inpatient and intensive care services.


Lee Regional is focused on helping co-workers at the hospital obtain new jobs. The hospital employs about 140 people, slightly more than 1 percent of the county’s workforce, and these co-workers will receive severance pay.