Officials optimistic that Callaway Community Hospital will reopen

Callaway Community Hospital closed three weeks ago after owners Noble Health temporarily suspended its license with the state. Officials are working to figure out how to get the hospital reopen.
FULTON SUN/MICHAEL SHINE
Callaway Community Hospital closed three weeks ago after owners Noble Health temporarily suspended its license with the state. Officials are working to figure out how to get the hospital reopen. FULTON SUN/MICHAEL SHINE

Officials are optimistic Callaway Community Hospital will reopen -- possibly as early as June.

Callaway County Presiding Commissioner Gary Jungermann and Fulton Mayor Lowe Cannell said while there's work to be done, they have a brighter outlook on the hospital's future. After meeting with interim CEO Jeff Stone and touring the facility earlier this week, Jungermann said he thinks the hospital could reopen by the end of June.

Noble Health System announced temporary closures for Audrain Community Hospital and the Callaway hospital on March 24 and furloughed 175 full-time employees between the two hospitals last week.

He and Jungermann visited the Callaway hospital Wednesday, Cannell said; they saw at least 20 people there working.

"They deserve a pat on the back for doing it," he said. "They care about their community and they care about the people they work with. When it's all said and done, we'll owe them a huge debt of gratitude for sticking it out."

Noble Health, which purchased the Callaway hospital in December 2019 and the Audrain hospital in January 2021, filed with the Department of Health and Senior Services to voluntarily suspend the license for each hospital effective March 25.

Under state law, the suspension is granted for a period of 90 days, according to a letter from DHSS.

This means Noble Health has until June 23 before that period closes and until June 9 to notify DHSS the hospitals are ready for review and inspection in order to reopen.

As sister hospitals, Callaway and Audrain are inherently linked and both are going through the same process.

"If this one fails, they both fail. If that one fails, this one fails," Cannell said. "They're together now, for whatever good or bad that is. That's the situation we're in, so we've got to root for them as well. We've got to hope that they succeed, too."

ER needs

In a recording of the three officials' meeting, which is available at callawaycountyclerk.com, Stone said the two main things he needs in order to reopen are emergency room physicians and a computer network.

Essentially without those, he explained, there isn't an emergency room, which means there isn't a hospital.

Those are the two main contracts, Stone said, that were not renegotiated before the end of March.

Part of the sale agreement when Noble Health purchased Audrain Community Hospital was that all major contracts needed to remain in place for at least a year, Stone said.

Cannell said one of the issues the hospital faces is difficulty finding staff. To offset that, the community hospitals -- like many across the nation -- resorted to contract providers.

Essentially, these staff members are hired through a company rather than by the hospital itself.

Cannell said the COVID-19 pandemic made the situation worse for hospitals because many nurses and doctors left the industry and those who stayed were overworked.

"They see these agency nurses making triple what they're making, instead of making $30 or $40 an hour, they could make $100 an hour as an agency nurse," he said. "So, they all flocked to agencies. Agencies are doing great, but the hospitals suffers, the nursing homes suffer."

Stone said the hospital is renegotiating with computer network providers.

The one piece of equipment the hospital cannot run without a computer network, he said, is the CAT scan machines.

CAT scans are required to be considered as an emergency room in Missouri, Stone said, and without an ER, the hospital couldn't be a hospital.

"If you get brought in, you have a head injury, we need to double check. You get brought in for risk of stroke, I have to have a CAT scanner in order to have an emergency room," Stone said.

When Noble Health purchased the Audrain hospital, he said, the previous owner -- SSM Health -- had a "very sophisticated IP network" and an expensive one to maintain. An IP network refers to any group of devices on the same internet network.

Maintaining the network cost about $200,000-$240,000 monthly between the two hospitals.

Between those two factors, Stone said, he had to voluntarily suspend the hospital's license because he couldn't provide an emergency room.

"Those are two very expensive contracts," he said. "(Now) we're past a year. We're into a voluntary suspension. So, we've basically reset all the rules in terms of our contracts and all of that."

Financials

Cannell said the Callaway hospital is behind on its utility bills to Fulton. It has also delayed paychecks for employees.

However, the hospital paid $24,000 toward the utility debt this week, which Cannell called a big step.

"That's not nearly what they are behind on, but we have a plan going forward with them," Cannell said and added they've set up a payment plan for the rest. "As long as they stay current, the city doesn't want to be the ones to shut their lights off."

This isn't the first time the hospital has had financial issues.

Prior to Noble Health taking over then-Fulton Medical Center in December 2019, the hospital wasn't in good financial standing.

According to Fulton Sun reporting at the time, the center closed in 2017 after University of Missouri Health Care sold its 35 percent stake in the operation back to then-owner NueHealth. NueHealth then contracted with EmpowerHMS, though it never transferred its ownership.

When EmpowerHMS's leadership became mired in a billing scandal, NueHealth dismissed the company in early 2019.

In October 2019, it looked as though the hospital was in danger of closing again, this time due to $3 million in debt owed to the Internal Revenue Service (IRS).

Weeks before Noble Health took over, officials reported paying off about half of the debt owed to the IRS and said they were establishing a payment plan. They also reported implementing cost-saving measures like firing several respiratory therapists and cutting ties with expensive contractors.

This week, Stone told officials "I have almost twice as much money owed to me as what I owe people."

On the patient billing side of things, he said, it typically takes 45-60 days between seeing a patient and receiving payment.

About 15 percent of ER patients don't have insurance, Stone said. That could mean the hospital doesn't get paid for a longer period of time -- or at all.

"They're using my most expensive piece of the hospital for their sinus infection," Stone said. "If they walk into my emergency room and say they want to be seen, I have to see them in my emergency room. I can't say 'Hey, Dr. Islam is across the street and he'd be happy to see you in about an hour for your sinus infection.'"

Jungermann said the county commission has been trying to educate people about what kind of medical issues call for a trip to the ER as opposed to a walk-in clinic -- like the one owned by Noble Health, located next to the hospital.

However, outstanding patient bills are only part of the hospital's current financial situation. Another issue is promised federal money that never arrived, Stone said.

The hospital was slated to receive almost $1.4 million in American Rescue Plan Act (ARPA) funds and $3.7 million in CARES Act funds through the Health Resources and Services Administration (HERSA).

The ARPA funds were supposed to come through in November. Funds from HERSA were supposed to come through in mid-December.

Neither payment has arrived, Stone said.

"Money is what's going to determine how quickly we're able to do something here," Stone said.

He said he's in contact with the director for HERSA on a regular basis trying to receive those funds.

"They're working on it," he said. "They're trying to push it through. They keep telling us it's going to be a couple more weeks. That's what I've been hearing since Christmas. (It) would have been $3.7 million. That's what I'm waiting on. $3.7 million will run this hospital for two and a half months."

Some areas of the hospital, such as the partner clinics and the geriatrics department, are doing well financially, Cannell said. However, the ER and other areas of the hostpial aren't paying for themselves.

From his understanding, Noble Health is looking at the financial stability of the whole system and is not trying to make every part of the hospital profitable on its own.

"They've been willing to take that hit as long as the whole picture is profitable," he said.

Furloughed employees

Stone said he's been in contact with other medical facilities in the region about temporarily hiring some of the 175 furloughed employees while Callaway and Audrain hospitals work on reopening.

"They are looking to temporarily hire some of my staff that way they can go get a temp job, they can make money until we're able to come back," he said.

The discussion is largely to offer these employees temporary contracts, but employees could choose to stay with those other facilities or come back after Callaway and Audrain hospitals reopen.

Stone said these agreements will help the other medical facilities that may also have the same issues with contracted providers costing more than in-house providers and it'll get the employees paychecks during the furlough.

Stone said he's also spoke with bank presidents in the region who are willing to work with employees who self-identify as being an employee effected by the closure.

"I've let them know my timeline for payroll, for employment," he said. "The paycheck I wasn't able to meet was April 1. My mortgage is due on the first, people's car payments and mortgage. The 15th is this Friday, utilities are due or people have loans that are due. Every bank in town, everybody in Mexico ... they're all like 'Oh yeah, they just need to self identify as an employee of one of these two hospitals and we'll figure it out."

Reopening

While Noble Health could request an extension to the 90-day temporary license suspension, Jungermann said after his meeting with Stone he doesn't feel the need.

"It's probably not going to be in the next month," he said. "But it's going to be well before the end of the 90-day period ... I'm relatively confident in saying they're working on trying to get this all resolved and have it all done before this original 90-day period expires."

Cannell agreed with that assessment.

"Not to be naive or whatever, but I actually do feel better today than I did this morning," he said. "After visiting with Jeff and touring the hospital, I'm at least mildly optimistic now and I really wasn't before."

He also said physically the hospital's facilities are in the best shape he's seen them.

Stone said the owners of Noble Health are "doing everything they can" to keep the hospitals going.

They have a letter of intent from an investor, he said, to either support or purchase both hospitals.

The intent is to open both Callaway and Audrain hospitals together.

"If it's not a full purchase, it's going to be an investment to get us reopen," Stone said.

Need

Jungermann said having a hospital in the area has a larger impact than just healthcare and employment for locals.

It can also serve as an economic driver.

"We have businesses in this town, such as Dollar General and some of the others, that came to this town years ago," he said. "One of the things that drew them here and got them here was because we had a hospital that was close.

"They needed that because of employees that they have and all the things they they need the hospital to do for them. Whether its drug testing or just taking care of a worker comp issue."