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Sunday, May 1, 2016

FCH board discusses license sale delay problems

Sunday, December 11, 2011

Perryman Auction employee, Alex Villanueva, tries to stir up interest in a box of metal bedpans at a Dec. 2 auction at the Fulton County Hospital. Photo by Richard Irby
A delay in completing the $1.7 million sale of its home health license and problems the delay are causing were main topics as the Fulton County Hospital Board met on Monday, Nov. 28.

Interim Administrator Kim Thompson said the deal to sell the home health license to the LHC Group would not be completed by Dec. 1, as hoped.

According to Thompson, attorneys from the hospital and LHC are working on the sale, but it will probably be late February to early March before the hospital will have access to the proceeds of the sale.

LHC attorneys believe that, since the county owns the hospital, Quorum Court must pass an ordinance authorizing the sale of the home health license, and there would then be a 60-day period before the sale could be completed.

"Are we sure of closure?" asked board member Danny Perryman. "There are rumors going around that the sale may not go through."

Thompson replied that she had not heard of any complications and attorneys are "taking extra precautions" to avoid problems.

Thompson was later asked to explain problems that have developed between the hospital and the Bank of Salem, because of the delay in completing the home health license sale.

Thompson explained that the Bank of Salem blocked hospital access to its Line of Credit in late November, by freezing the account. A bank official told Thompson it expected the hospital to make a payment on the $250,000 Line of Credit, using money from the license sale or Medicaid reimbursement funds the hospital recently received.

Thompson showed, through a letter of agreement the hospital submitted to the bank in October, that it had agreed to pay the line of credit with money from the license sale and was not obligated to use Medicaid funds.

Through negotiation, the hospital agreed to make a $75,000 line of credit payment, and will pay $25,000 every 60 days until the home health license sales goes through.

Some board members said they did not understand the bank's position and feared, despite the hospital payment, the bank was not allowing access to the line of credit because it doubted the license sale would be completed.

Board member John Ed Welch, who is also on the Bank of Salem Board of Directors, was asked to explain the bank's position.

Welch said "some on the board have concerns" about the license sale but, as far as he knew, the concerns were based on "speculation, not facts." According to Welch, there is concern that the USDA, which is owed on a construction loan, would have first access to collateral the hospital has put up on the Line of Credit.

"They are picking at straws," board president Bill Pace complained. Noting that interest is up to date on the account and it is a non-matured note, Pace said, "We should be able to use the Line of Credit."

Seeking a line of credit elsewhere was suggested, but the discussion ended with Thompson expressing hope attorneys could speed up work to close the license sale as soon as possible.

"We need the Bank of Salem. They need us. We need to be partners in the community," Perryman said.

The first month of management by the Ozark Medical Center appeared to go smoothly.

According to Thompson, OMC has hired a consultant to look at Fulton County Hospital's costs and operations, and many OMC directors have been to the local hospital "looking for efficiencies" - ways to improve operations and cut spending.

Paperwork is being completed that will allow the Fulton County Hospital to participate in OMC's group purchasing plan, which should lower costs for drugs, supplies and other expenses.

OMC CEO David Zechman praised the medical staff for an increased number of patients being admitted to the hospital. Sixty-two patients were admitted in October of 2011 compared to 47 in October of 2010. According to Zechman, that trend needs to continue to help the hospital reach better financial footing.

Thompson discussed October financial records, which showed an increase in net patient service revenue and a decrease in budgeted expenses. As a result, the hospital's net loss in October was $314,449, compared to a net loss of $638,699 in October of 2010.

Bad debt -- losses from unpaid patient bills -- remains a concern, as does the amount of long-term debt the hospital owes.

Board members have received a proposal from OMC that would allow it to begin managing the hospital for a three-year period beginning in late December. OMC is currently providing interim management for 60 days without charge to the hospital.

After the management agreement goes into effect, OMC will charge a management fee and the hospital will pay the salary and benefits of an administrator OMC will hire.

Salem attorney Dewayne Plumlee is currently reviewing OMC's proposed management agreement. Board members discussed whether there was a need for an attorney specializing in hospital management to also review the proposal. Because of the high hourly cost of a specialized attorney, it was decided to depend on Plumlee's recommendation.

In other business, Ken Harper of the Hospital Foundation told the board that the Foundation had provided $3,500 to allow the hospital to purchase a needed blood coagulation device and, in partnership with Fulton County Hospital Volunteers, had spent $1,100 to buy new television sets for patient rooms.

Harper said the Foundation's thrift store at Salem City Park continues to make money, and it is hoped profits will continue to grow. The foundation is still in need of volunteers to help run the store, which is open from Wednesday through Saturday.

Thompson told the board that the hospital planned an auction on Friday, Dec 2, to sell surplus equipment, furniture and other items the hospital no longer had need for. Board member Danny Perryman donated his services to conduct the auction.

Thompson also announced that a group of OMC employees will come to the hospital on Friday, Dec. 16, for a work day. The employees will spend the day trying to paint all of the rooms in the acute care wing of the hospital. The painting, new individual heating and cooling units and new televisions will give the in-patient rooms a much needed face lift.

The board ended its meeting by deciding to move its December meeting to Tuesday, Dec. 20, at 6 p.m. On Dec. 19, board members will travel to West Plains to attend OMC's board meeting, with a holiday party to follow, to allow the board to meet with OMC board members and administrators.

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