New Mexico attorney general launches probe of patient care at private equity-run hospital

New Mexico’s attorney general announced an investigation Tuesday 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.

The attorney general, Raúl Torrez, said his office is examining Memorial’s patient policies for compliance with a state law and the hospital’s performance under the New Mexico statute governing provision of care to needy patients.

At the news conference announcing the investigation Tuesday, Torrez said he had just met with patients, as well as providers at Memorial, to discuss their concerns. 

“It is apparent to me that the management of this facility has failed to place the well-being and safety and care of their patients in the proper place and in the proper priority,” he said. “It is apparent to me that decisions have been made from a standpoint that is seemingly motivated by profit, by maximizing the bottom line and without due respect and due regard to patients under their care.” He also warned hospital management not to retaliate against anyone speaking out 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. Physician records and interviews with 13 patients detailed denials of care by the hospital or demands of upfront payments to secure treatments.

Barbara Quarrell, a former nurse at Memorial, is one patient who said the hospital turned her down for care after she was diagnosed with cancer in 2022. She recounted her story at 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 no longer about the patients. Why are they even in health care if it’s not about patients?” 

In a statement, a spokeswoman for the hospital said, “Memorial Medical Center was surprised to learn of this investigation by 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 be cooperating fully with this investigation.”

Before publication and broadcast of the report in June, Memorial told NBC News it does not deny care, but two of its top officials called to apologize to two patients who had told NBC News that they were turned away.

A spokeswoman for Apollo did not respond to an email seeking comment.

Lifepoint Health, the operator of Memorial, oversees the country’s largest chain of mostly rural hospitals — 62 acute care facilities in 16 states. Lifepoint is a subject of two U.S. Senate inquiries, along with other health care companies owned by private equity, NBC News has reported. The investigations aim to assess the profits Apollo and other firms reaped in the deals and whether they harmed patients and clinicians. Apollo has said it is cooperating with the inquiries.

Although Lifepoint runs Memorial, the facility and the land it sits on are owned by the city of Las Cruces and Doña Ana County. Denying care to patients could violate the 40-year lease Memorial struck with the county and the city in 2004. The lease says the facility must generally continue providing care to “those unable to pay the full cost of healthcare services rendered to them.”

About 225,000 people live in Doña Ana County, the urban and rural region Memorial serves, and almost 15% have no health insurance, recent census figures show. About 23% of county residents live in poverty, compared with 11.5% nationwide.

One focus of the state investigation, Torrez said, is whether Memorial misrepresented its health care services for needy patients. The hospital’s most recent annual report to the community said: “Delivering care to all of our neighbors, regardless of their ability to pay, is foundational to our mission and our commitment to our community.”

Torrez is also investigating whether Memorial violated a New Mexico law governing financial assistance programs for patients. The Patients Debt Collection Protection Act requires hospitals to screen for financial assistance, he said, adding that “patients who are turned away without screening would constitute a violation of the law.” Some of the patients NBC News interviewed for the June report described being denied care without being screened to determine whether they could use financial assistance.

Before 2004, Memorial operated as a community nonprofit hospital. Under Lifepoint, Memorial is a for-profit entity and highly profitable. 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 charged among for-profit hospitals nationwide is less than five times their costs, according to Ge Bai, professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health, who is based in Washington, D.C.

The CMS hospital comparison site confirms that Memorial’s Medicare costs per beneficiary are both higher than the national average and almost 20% higher than the state average.

Yolanda Diaz is a patient advocate at CARE Las Cruces, a nonprofit organization she founded that helps needy patients pay for health care and expenses. Diaz has been notifying county and city officials since 2021 that Memorial was turning away patients, a practice she said she found inhumane and unjust.

“I was disappointed that no one in Las Cruces and Doña Ana County leadership stepped forward to take needed action, but I had hope,” Diaz said in an email. “I believe the New Mexico Department of Justice launching an official investigation is the absolute best action course and I hope for disclosures to the public, needed change and justice.”

Hospital documents produced under open records requests show that Memorial’s written indigent care policy for years directed it to provide care to patients who were unable to pay the full costs of their treatments and discussed discounts or cost-sharing arrangements for people who met income criteria. That changed last year, five years after Apollo, the private-equity giant co-founded by Leon Black, bought Lifepoint, the records show.

Private-equity firms like Apollo have taken over much of the health care industry in recent years. The firms typically load debt onto the companies they buy, then cut costs to increase earnings and appeal to potential buyers later. Almost one-quarter of New Mexico’s hospitals are controlled by private-equity firms, according to a study by the Private Equity Stakeholder Project, a nonprofit operation 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 private-equity firms’ involvement in the industry results in significant cost increases for patients and payers, such as Medicare. Lower quality of care has been associated with the firms’ investments in health care, research shows, including 10% higher mortality rates at nursing homes owned by private equity and more incidents of infections, blood clots and falls at hospitals.