Allegiance Health Management four months behind on rent for ES Hospital
Allegiance Health Management is late on rent.
At the Eureka Springs Hospital Commission’s Monday meeting, commissioner John House asked where the rent check is. The commission hasn’t received a check in four months, said chairman Michael Merry. Merry said that’s because of problems with Medicare payments.
“There’s a federal government interference in paying Medicare,” Merry said.
Catherine Pappas, the hospital’s community outreach coordinator, said there have been months where the hospital hasn’t received any money from Medicare because the hospital received money it shouldn’t have from Medicare in 2015. Allegiance was fined $1.6 million for the outstanding payments, House said.
“They’re wanting it to be paid back,” Pappas said.
The hospital won’t receive any money from Medicare for a while, Merry said.
“Medicare says, ‘Instead of you having to pay us, we won’t give you anything until we get what you owe,’ ” Merry said.
House asked how much money Allegiance owes the commission in rent, and Merry said it comes to $67,500 to date. Allegiance is required to pay $15,000 per month, Merry said. Commissioner Christopher Baranyk asked how long it would be until the commission seeks litigation against Allegiance.
“We’re supposed to give them notice and if they don’t rectify it within 30 days, then we give them 180 days notice that we’re going to terminate the lease,” House said. “None of that has happened yet, because we want to keep our hospital running.”
Allegiance has a designation for critical care access, House said, and that designation will disappear if the commission terminates the lease. House said the hospital must always be open to keep the designation.
“If we close for one day, we lose that designation,” House said.
“How do we get that designation back?” Baranyk asked.
“We won’t, because we’re grandfathered in,” House said. “The only way we get it is if we keep Allegiance here until somebody else comes along that can get that together and have it ready so they can get in and take it over that same day.”
Commissioner Suzanne Tourtelot said she’d like to have an explanation of the situation in writing, and treasurer Barbara Dicks said she’s spoken with the hospital’s CEO Vicki Andert several times over the past four months.
“There’s different reasons … the Medicare and this and that,” Dicks said.
“These are excuses,” Baranyk said. “We’re talking about a multi-billion dollar company. If they can’t manage their finances to run a hospital, I don’t understand.”
Andert said the commission has been understanding toward Allegiance in the past.
“Our hope is they will agree that the healthcare for our community should come before rent,” Andert said. “The hospital addresses expenses needed for the care of our patients first and our local vendors second.”
Andert added, “A Medicare recoupment from a 2015 overpayment has affected finances currently, but there is gradual improvement.”
Dicks said she hasn’t put anything in writing, and Baranyk said the commission should do so. Baranyk suggested looking for other companies that might want to run the hospital. Merry said he wanted to talk to Allegiance first.
“I really don’t want to give Allegiance the impression we’re shopping,” Merry said.
“It’s a wise idea to have a Plan B,” Baranyk said. “This is a four-month process that hasn’t been followed because we’re worried about ruffling feathers.”
House said he’d like to send an official letter to Allegiance saying the company has violated the lease agreement and Baranyk agreed.
“This small-town mentality is not working with big people,” Baranyk said.
He’s willing to go to court to resolve the issue, Baranyk said.
“I’m not looking to go to war, but war is not off the table for me,” he said.
Andert said Allegiance has had many positive advancements to make the hospital successful, like more MRI services, a top-of-the-line CT machine and radiology equipment.
“This shows growth to provide those services needed by our citizens,” Andert said. “It does not indicate mismanagement.”
The commission’s next regular meeting is scheduled for 6 p.m. Monday, Nov. 19, at the Echo Community Room.