Hospital faces Friday shutdown
Hillsboro sets utility payment deadline, fears being sued, as employees cope with canceled insurance
If Hillsboro Community Hospital doesn’t pay $28,644.31 owed to the city of Hillsboro for utilities, service will be shut off at noon Friday.
“I have directed city administrator Larry Paine to shut off utilities at noon Friday if the bill is not paid in full by that time,” mayor Lou Thurston told city council members Tuesday.
A second debt owed by the hospital gave rise to a half-hour executive session to discuss potential litigation.
“We may have been sued as a co-defendant by the mortgage holder, Bank of Hays,” Thurston said when he called for the executive session.
Back in open session at 7 p.m., Thurston announced no decisions had been made.
A $10,247.96 check for the hospital’s October utility bill bounced in December. November and December’s bills, totaling $18,396.35, remain unpaid.
City attorney Josh Boehm on Dec. 21 sent hospital owners a letter demanding immediate payment of $18,534.66 in delinquent utility charges and a $9,000 deposit to secure the account.
Boehm’s letter, addressed to Health Acquisition Co. in North Kansas City, now owned by EmpowerHMS, was undeliverable because the company was no longer at that address.
Additionally, but not discussed at Tuesday’s meeting, the hospital is $7,412.50 behind on rent for the land upon which it sits, Paine said.
Hillsboro’s Public Building Commission took out a $1,325,000 bond issue in 2015 so the hospital could be built.
Under terms of the agreement, the hospital would pay rent to the city, which in turn would pay down the bonds.
“If the city doesn’t get paid, the city has to pay the bond,” Paine said.
The city does have about $550,000 set aside that can be used to pay the bond, he said.
“What we’re expecting is, we can pay bond payments until Empower HMS can get settled and pay rent,” Paine said.
Whether Hillsboro will continue to have a hospital remains to be seen. Although the state can take a financially insolvent adult care facility or nursing home into receivership until issues such as these are resolved, no such process exists for hospitals.
Gerald Kratochvil, communications director for Kansas Department of Health and Environment, said the state agency hasn’t had any experience with a hospital near or undergoing bankruptcy.
“The hospital would primarily deal with Centers for Medicare and Medicaid Services, particularly if CMS canceled the provider agreement because they no longer met appropriate requirements for participation in Medicare,” Kratochvil said. “KDHE would need to be notified, as it is the licensing agency. There is no receivership process as with nursing home facilities. KDHE would not be taking over the hospital, nor would CMS.”
Local pharmacies say they are aware HCH employees’ health insurance plans aren’t covering prescriptions.
Hillsboro Hometown Pharmacy owner Eric Driggers said the pharmacy has been trying to work with customers in whatever ways it can if their insurance will not pay.
“We try to change it or find an alternative,” Driggers said. “It gets difficult at times.”
Driggers said prescriptions to treat certain medical conditions, such as diabetes, are likely to be expensive, with no low-cost drug available.
With some customers, the pharmacy tries to work out a plan to pay for prescriptions.
“We try to work with everyone we can and try to figure out a solution,” he said.
Discount cards give customers the best cash price available but are not as good as the discount card issuer makes them sound, he said.
“Insurance is almost 100 percent better,” Driggers said.
Tracy Lanning, owner of Lanning Pharmacy in Marion, said an HCH employee needed a prescription filled in early December and learned their insurance was no longer valid.
“It was no surprise when we told them it didn’t go through,” Lanning said. “In a case where we know it’s not going to get reinstated, we make them pay, but if it’s any other situation, we try to work with them.”
Sometimes a generic medicine can be substituted. Sometimes the pharmacy gives customers a week’s worth of medicine at no charge until a solution can be found, Lanning said.