Winchester, Va.-based Valley Health is making operational changes across its six hospitals, including transitioning physician management and closing a unit, amid financial pressure tied to Medicaid reimbursement cuts.
The system will transition emergency physicians and hospitalists to SCP Health, ending contracts with Emergency Medicine of Blue Ridge and Sound Physicians, a spokesperson told Becker’s. SCP Health will assume emergency physician management Sept. 30 and hospitalist management at the start of 2027.
The changes are tied to about $80 million in annual lost revenue from Medicaid reimbursement cuts and are expected to generate more than $1 million in monthly savings.
Valley Health will also close the observation unit at Winchester Medical Center, the system’s flagship hospital, on July 1, with patients instead receiving care in inpatient rooms.
“This decision reflects our responsibility to ensure Valley Health remains strong and sustainable for the communities we serve,” President and CEO Mark Nantz said in the release.
Valley Health said no reductions in physician staffing are planned, and emergency departments will remain fully operational during the transition.
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