Prague hospital runs short of supplies as financial troubles deepen
PRAGUE — Less than two years ago, a group of investors and managers said they could give four struggling rural hospitals a chance to thrive, with new buildings and new services to attract patients.
On Tuesday, nurses at Prague Community Hospital told their city council that they are reaching into their own pockets to buy supplies like toilet paper and are diverting patients to other hospitals because they don't have a working CT scanner or the equipment necessary to run basic blood tests. A nurse practitioner said she had to put off her own medical care after she found out she didn't have health insurance, even though premiums had been deducted from her checks.
At the standing-room-only special meeting, registered nurse Becky Podest choked up while describing the hospital's financial condition, which she said had worsened under management company Empower HMS.
“The company that's running us is not allowing us to get any supplies,” she said. “Without supplies, I can't take care of my people, so I'm asking for help from anyone.”
It remains to be seen what form help might take, or if it will come. The Prague council authorized its city manager and attorney to take steps, to stabilize the hospital's finances, including negotiating or filing a lawsuit.
Prague City Manager Jim Greff said the city owns the hospital building, but leases it to Empower. He said council members didn't know the hospital was having financial problems until employees didn't get their Dec. 7 paycheck. Employees finally did receive their pay, though it came a week late.
While the council considered its options behind closed doors, hospital employees peppered hospital CEO Shelly Dyer with questions, including whether the hospital would be financially viable if it separated from Empower. Dyer had told the council that Empower CEO Jorge Perez is “all in” on stabilizing the hospital, and had taken out a personal loan to make payroll.
“We just paid Medicare $300,000,” she said, referring to recoupment payments the federal government demands if a hospital has received more than its due. “We would not have made payroll for three months on our own.”
Representatives for Empower HMS didn't respond to messages seeking comment.
Paul Nusbaum, president of Rural Community Hospitals of America and Health Acquisition Company, which own a stake in several of the hospitals and contracted with Empower to manage them, blamed the hospitals' struggles on the difficulty of working in rural areas, and on Blue Cross Blue Shield of Oklahoma's decision to cut them out of network.
However, Empower-affiliated hospitals in Missouri, Kansas and Arkansas, which weren't cut out of insurance networks, also reported delaying paydays this month, according to The Kansas City Star.
“Nobody in Oklahoma should be surprised these hospitals are struggling because of what Blue Cross did,” Nusbaum said.
Woes at other Empower hospitals
Blue Cross ended its contracts with the hospitals due to alleged inappropriate billing. Last year, the Missouri auditor's office accused another Perez-owned company, Hospital Partners Inc., of running a billing scheme by charging for tests it never performed, according to The Star. Perez denied wrongdoing.
If Prague goes to court, it would be the second city in Oklahoma to do so. The city of Fairfax filed suit against Empower and several related companies Dec. 13, asking to repurchase the hospital and claiming the defendants have “abandoned” the hospital and were behind on paying employees. The Fairfax lawsuit also tried to prevent Indian Electric Cooperative from cutting off power to the hospital after it failed to pay its electric bill.
Nusbaum said Empower still is in talks with the city of Fairfax, but the city will have to repay “significant outside expenditures” if it wants to repurchase the hospital.
The other two Empower-affiliated hospitals, Drumright Regional Hospital and Haskell County Community Hospital in Stigler, also had cash flow problems this month and had to delay payroll for a week. In the case of Drumright, a person who identified himself as a city resident set up a GoFundMe account in case employees' checks never came.
Nusbaum said the hospitals' finances should improve in the spring, because patients typically have fewer elective procedures over the winter. He said Empower executives are trying to secure $6 million in loans to finance improvements to the hospitals, though he admitted lenders aren't likely to offer much to indebted rural hospitals unless executives in the management company personally guarantee the loans.
“Critical access hospitals' only long-term chance of survival is new buildings,” he said. “It just takes a long time and a lot of upfront money to get these programs going that will help hospitals keep the doors open.”
Podest, who has worked part-time at the Prague hospital for 20 years, said she doesn't see any signs its situation is improving, though.
“Every week when I go there, there's less supplies and less supplies,” she said. “I am praying to God that somebody buys us out and takes us over.”