The closing last month of Crittenden Regional Hospital (CRH) in West Memphis and the bankruptcy filing that followed not only has been devastating to the community, but also had an immediate impact on Memphis. And the effects are still emerging.
One West Memphis official has called the closure, “the biggest nightmare for our county.”
Arkansas attorney Denny Sumpter has filed a lawsuit alleging that insurance premiums withheld from employees’ checks were not applied to their healthcare claims. CRH was self-insured, with a third-party administrator. Sumpter has a personal stake, as his mother was a CRH employee for more than 35 years and between her and her husband have about $100,000 in medical bills left unpaid.
“The employees knew the hospital was in financial trouble. They were being turned over to collection agencies and told 'just pay $20 a month on it, we’ll get to it,'” said Sumpter, who said court evidence will show that since January nothing has been paid to the third-party administrator, Cigna.
“The proper thing to have done would have been for Cigna to cancel the plan and notify employees. Had they done that or had the hospital done that, these employees would have been able to get on the health care exchange. They would have at least had health insurance,” he said.
Cigna is named in the lawsuit as well as the Crittenden Hospital Association; Gene Cashman, the former CEO; and David Raines, the chairman of the board.
In a statement to Memphis Medical News, Cigna said it "does not comment on pending litigation, and any questions related to the hospital’s self-funded benefit plan should be directed to the hospital.”
The hospital closed on September 7 with an estimated debt of nearly $30 million ($23 million plus a $6 million lien on the property). It filed for Chapter 7 bankruptcy five days after closing.
A referendum on a one-cent sales tax increase had been passed in June to help the hospital, with county voters approving it by 86 percent. The tax would have generated $30 million for the hospital over five years to keep the facility from closing. The tax was to start collection October 1. Crittenden County Judge Woody Wheeless said officials are trying to get the tax stopped, but it would take another vote to discontinue it.
“The earliest we can get it on the ballot is December, so it is possible that two months’ worth of taxes could be collected. The only thing the money can be used for is maintenance and operations of the hospital,” he said. “I am going before a circuit judge to determine where we go from here. The State of Arkansas said it is the first time a tax has been asked to be repealed before it was collected.”
Regarding the allegations, he said a financial audit by an outside firm is warranted. He cited monthly financial statements required per a decades-old agreement with the hospital association. He said he had requested them but hadn't received them for 21 months. Wheeless also said employee pensions are underfunded by an estimated $9 million.
He recounted the job losses, lost benefits, debt, lack of emergency services for the citizens and said, “This is the biggest nightmare for our county.”
One of the hurdles in finding a buyer or tenant for the hospital is that the buildings are part of the bankruptcy. The property was used as collateral to back $8 million in revenue bonds taken out by the Crittenden Hospital Association in 2007. Wheeless said $6 million is still owed, and an arrangement would have to be made with bondholders before the property could reopen. A team is being formed to actively recruit potential hospital users. Interest has been expressed in the facilities before, he said, but renovation and modernization costs had been prohibitive.
Wheeless said a number of doctors are owed money by the hospital. The ones with practices bought by the hospital were sent scrambling to set up elsewhere and get relicensed with insurance companies and the Affordable Care Act in order to continue in practice, he said. Those doctors are having to admit patients to other Arkansas hospitals or to Memphis.
Memphis hospitals most likely to now see Crittenden County patients are Methodist University Hospital, Regional One and Le Bonheur Children’s Hospital. Le Bonheur spokesperson Sara Burnett said there is really no change in service to Crittenden in pediatrics.
“We already had a very positive relationship with the regionals,” she said. “With Pedi-Flite and our designation as a children’s trauma center on the state level in Tennessee, Arkansas and Mississippi, we would have gotten those children here anyway.”
Regional One said the same. “We already have the trauma business from Crittenden and the high risk OB,” said spokesperson Angie Golding. “We have seen an increase in our ED, but not a level of volume we can’t handle – more like an uptick in non-critical emergency. And we had experienced that increase before when they closed for six weeks after their fire (earlier this year).”
Ray Walther, MD, medical director of the Methodist University emergency department, said it initially had experienced about 20 to 30 visits a day above its usual volume. Those numbers are stabilizing, he said, and the recent move into a new, more spacious ED was helping. He also said major trauma would go to Regional One, but Methodist is seeing more people with chronic illnesses such as chronic heart failure, cardiac problems and diabetes and other medical problems. Because CRH was part of a stroke network in Arkansas, he expects to see more of those primary neurologic and cardiac events as well.
Walther is a veteran director of emergency departments in rural hospitals in Somerville, Brownsville, Dyersburg, Osceola, Blytheville and Wynne, and expressed concern about the lack of emergency services in Crittenden County.
“It is difficult for me to believe a county that large would go without a hospital," he said. "However, Brownsville has closed and there have been lots of closings of rural hospitals across the United States. The number of ERs nationally is declining. You would think level one trauma would be brought to trauma centers here by helicopter. However, a lot of people walk in and drive themselves when it’s very serious trauma, so theoretically, there could be deaths.”
Cristie Hollis, a patient and former employee of CRH, said her family will have to go to Memphis to receive emergency care. “Unfortunately, the only two times my husband and I needed care, there really wasn’t time to get to Memphis," she said. "My husband probably would have died if not for being stabilized at CRH before transport to Memphis.”
She said she was unable to comment further on the closing of CRH due to the lawsuit.
Rural ambulance services have been stretched. Crittenden Ambulance Service Corporation has reported that calls that previously took 15 to 20 minutes sometimes were taking hours. Judy Thomas of CAS said that concerns not only included construction delays but also longer trips and bridge icing in winter.
“There are elderly residents that just refuse to cross that bridge,” she said. “And if we are in transport to Memphis from Earle or somewhere and then we have a wait time, it is taking critical care for other patients out of the county.”
The closure is also sending some jobs across the river. A job fair was held for CRH employees before the closing. Organized by Methodist Le Bonheur Healthcare, a management consultant to the hospital, the fair included Methodist Le Bonheur, Tenet/St. Francis, Office Team, Regional One Health, Baptist Memorial Health Care, Helena Regional Medicine, Christ Community Health Services and others for a total of 33 employers.
Methodist reported about six hires from the fair just a couple of weeks after it was held, said Tracy Moore of Methodist human resources. Regional One had two new hires at that time as well and also had received several applications, Angie Golding said. Bright Star Care, a nurse staffing agency, had a few applicants and expected more, said branch manager Kay Shultz.
The home health and hospice portion of CRH was bought before bankruptcy was filed, enabling patients to have no interruption in service and to see the same caregivers. It was acquired by Scott Ferguson, a West Memphis radiologist, and Rick Williams, an owner of hospice care facilities around Arkansas. The sale saved about 50 out of more than 400 jobs within the Crittenden regional system.
