Lee County Community Hospital in Pennington Gap is not on any of the risk lists in a June 2026 state report on the finances of Virginia’s rural hospitals. The hospital was in the news last fall, when coverage described it as one of six in Virginia vulnerable to closure because of federal Medicaid changes.
The report by the Joint Commission on Health Care, a commission in the legislative branch of state government, mentions the hospital once in its text, in a history of rural closures: “Lee County Community Hospital closed in 2013 and later reopened in 2021 under a limited-service model, restoring emergency and outpatient care but not full inpatient capacity.”
There is also new money for the hospital’s technology. It is one of three hospitals in the region that a $2 million grant to Ballad Health will connect more closely to Ballad’s regional command center.
Who is on the state’s lists
Commission staff measured risk in two ways. Using factors that the Center for Healthcare Quality and Payment Reform links to closures, the staff found 13 hospitals at risk or at immediate risk of closure. A second model, the Sheps Center’s financial distress index, puts 12 at the highest or mid-highest risk of financial distress. Seven hospitals fall in the top category of at least one of the two.
Several of those hospitals are elsewhere in Southwest Virginia. Ballad’s Dickenson Community Hospital and Smyth County Community Hospital are listed as at risk of closure. Carilion Tazewell Community Hospital is at immediate risk of closure and at the highest risk of distress. Buchanan General Hospital is at mid-highest risk of distress.
Lee County Community Hospital is not on any of those lists. Besides the passage about its closure and reopening, its name appears only in the report’s appendix data tables.
Why the hospital has been watched
The warning last fall came during a visit by then-candidate Abigail Spanberger in October 2025. Cardinal News reported that hospital administrator Cindy Elkins said 75% of the hospital’s patients depend on Medicaid or Medicare.
The same article called it one of six Virginia hospitals considered vulnerable to closure because of the federal Medicaid changes. The article does not name the source of that count.
The hospital has closed once before. Citing Ballad Health, Cardinal News reported that it shut down in 2013 after insurance reimbursement cuts and a lack of consistent physician coverage. The community then won General Assembly legislation that created a hospital authority, and the authority acquired the building. Ballad reopened the hospital in 2021.
What the $2 million grant pays for
The grant was part of a round announced on October 2, 2026. That day, the Virginia Health Care Foundation announced 25 awards totaling $14.39 million through Virginia’s Rural Health Transformation Program. The program is paid for by a federal award of $189,544,888.14 from the Centers for Medicare & Medicaid Services.
Ballad Health received $2 million “to upgrade the networks and communication tools connecting Norton Community, Lee County, and Lonesome Pine hospitals with its regional command center, expanding telemedicine services,” according to the foundation’s announcement.
Screening day on October 28
Patients in Lee County also have a date to note this month. Ballad’s mobile mammography unit, which offers 3-D mammography, is scheduled to stop at Lee County Community Hospital, 127 Healthcare Dr., Pennington Gap, on Wednesday, October 28, from 9 a.m. to 4 p.m.
That schedule was published by WCYB on October 12. The listing does not say whether appointments are needed, so patients may want to call the hospital first.
The hospital authority that owns the building was also scheduled to meet at the hospital on October 15, according to a Lee County public notice. The notice says meeting materials can be requested from the authority’s listed contact.