Huntsville, TN (2016-04-04) Just one day after Pioneer Community Hospital of Scott suspended inpatient admissions, the hospital’s CEO addressed the Scott County Board of County Commissioners Monday night about the healthcare providers hopes for the future.
Tony Taylor, CEO of Pioneer Community Hospital of Scott, appeared before the Scott County Commission Monday night to address last week’s announcement that Pioneer Health Services, Inc., the parent company of Pioneer Community Hospital of Scott, had field for Chapter 11 bankruptcy protection and the projected impact that announcement was having on the local hospital. “It (was) a complete shock to us,” Taylor said. The local facility was notified the day after the parent corporation filed for bankruptcy protection in the U.S. District Court in southern Mississippi on March 30, 2016. While the locals are still reeling from the announcement, the corporate office is still expressing optimism. “(They’re) optimistic that they will get things turned around and we will get back on track,” he added.
Meanwhile, the local facility has reduced services in an attempt to stave off further financial troubles. On Sunday, the local hospital discharged its last patient(s) from its med-surg department and temporarily closed its inpatient services. The company is focusing on the more profitable pieces of its business, namely outpatient services, hoping by reducing costs and maximizing its outpatient potential it can overcome its financial woes.
The reduction in services affected about 40 employees, which were let go. Prior to the cut-back, the hospital employed about 150 people.
Locally, the hospital has had good and bad months. In March, the local facility reported netted about $100,000 in profit; however, in past months, the facility has seen its profits wiped out on paper by significant administrative write-off attributed to operational losses when it first open in 2014. Last December, the facility wrote off about $600,000 in bad debt, most of it dating back to 2014. The facility has also had to make another $1.2 million in administrative adjustments since it opened, including returning more than $600,000 to Medicare. The local hospital has to maintain cash collections of between $900,000 and $1 million per month to cash flow operations.
While the local facility has met or exceeded its projected goals, much of those revenue estimates included both nuclear medicine and surgery. According to Taylor, neither of those services has been offered to date; however, state certification of the hospital’s new surgical steam generator is pending, and outpatient surgery should be available soon.
The financial troubles for Pioneer Health Services, Inc. are much broader than just the local facility; as last week’s filing involved the parent corporation, six of Pioneer’s hospitals, and 23 physical therapy offices. The parent corporation is reportedly embattled in a lawsuit with Cigna Health and Life Insurance Company for allegedly not paying its portion of employee health insurance premiums. In that suit, Cigna is seeking more than $1.7 million.
Last March, the Scott County gave the company permission to borrow money against the facility to fund improvements. According to Taylor, the company, to date, had spent $350,000 of the $450,000 loan proceeds on the designated improvements. The remaining funds were being withheld to make modifications to the facility to reintroduce gero-psych services. In the original agreement between the county and Pioneer Health, the company couldn’t collateralize the building for a period of two years from the day it opened, December 1, 2013; however, the Commission allowed the company to take out the loan last March, provided all the proceeds were used to make improvements. In return, the company agreed to a four-year extension of the requirement that the facility could only be used to provide hospital services—a total of ten years.
In addition to the companies other woes, the Internal Revenue Service reportedly placed a lien on the local facility in March for unpaid taxes. The IRS is seeking more than $500,000 in unpaid taxes dating back to when the facility first opened.
In spite of all its troubles, the local facility is open and will continue to provide 24-hour emergency care and outpatient services. The hospital affiliated medical practice, Family Care Clinic, is likewise open and seeing patients.