Pipeline Health agrees to $1.5M settlement over Illinois hospital acquisition

Pipeline Health, the owner of now-closed Westlake Hospital in Melrose Park, Ill.,, has agreed to pay $1.5 million to resolve a 2019 lawsuit in which Melrose Park claimed Pipeline acquired the 230-bed hospital under false pretenses, according to the Chicago Tribune

The village of Melrose Park alleged Los Angeles-based Pipeline Health made fraudulent misrepresentations when it acquired Westlake Hospital. The lawsuit claimed Pipeline Health and its owners promised to keep Westlake Hospital open when they were buying it and two other hospitals from Dallas-based Tenet Healthcare. However, Pipeline revealed plans to close Westlake Hospital a few weeks after the transaction closed.

The lawsuit further alleged Pipeline kept its plans to shut down the 230-bed hospital secret until the transaction closed to avoid opposition from village leaders and community members.

The out-of-court settlement, approved by the village board July 27, also resolves a second lawsuit filed by Melrose Park in Cook County Circuit Court challenging an April 2019 decision by the state Health Facilities and Services Review Board to approve Pipeline’s application to close the hospital. Once that board approved the application to shutter the hospital, Pipeline started winding down services at the hospital and filed for bankruptcy liquidation in August. 

Pipeline and its affiliates did not admit any wrongdoing or liability as part of the settlement.

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