The CEO is on his way out and the board has been dissolved at Rehabilitation Hospital of Indiana, as its owners—Clarian Health and St. Vincent Health—work to pull the hospital closer to their own operations.

The hospital, located near West 38th Street in Indianapolis, helps patients recovering from brain and spinal-cord injuries, strokes, amputations, neuromuscular diseases and other disabilities.

On Sept. 24, RHI dissolved its board and replaced it with an oversight committee filled by executives of the two local hospital systems: Clarian’s Chief Operating Officer Sam Odle and Chief Financial Officer Marvin Pember, along with St. Vincent’s COO Ian Worden and its CFO Marvin White.

They will lead a transition plan that begins with the departure of Rehabilitation Hospital CEO Denny Armington. He will be temporarily replaced by hospital CFO Sid Norton.

An internal memo sent to Clarian employees notes that the hospital, even though owned by Clarian and St. Vincent, effectively has operated independently for nearly 20 years. But other hospital systems have rehab operations closely integrated with their surgery and acute-treatment staffs, making referrals and transfers smoother.

“As one of the few free-standing rehabilitation hospitals in the state of Indiana, RHI has been challenged in competing with other facilities whose operations are more closely aligned with those of their parent organizations,” the memo to employees stated. “To strengthen RHI’s ability to deliver superior care to patients for years to come, we are making leadership changes and establishing a new management oversight structure to achieve this kind of closer integration.”

Rehabilitation Hospital has recorded more than $1 million in losses on its operations in each of the past two years. In 2009, its patient-services operation pulled in revenue of $34.7 million, but lost $301,000, according to a filing with the Indiana State Department of Health.