JoCo hospital company abruptly closes Missouri location, citing regulatory problems
An Overland Park-based hospital company announced on Wednesday it would abruptly close a central Missouri community hospital because of ongoing regulatory issues with the state.
Pinnacle Regional Hospital said on its Facebook page late Wednesday morning that it would voluntarily close its Boonville hospital by 7 p.m. The hospital’s post cited regulatory issues with the Missouri Department of Health and Senior Services. After conversations with that agency, the hospital said it “determined that the economic hardship of bringing the facility into compliance is too great to make the appropriate repairs necessary.”
The hospital did not specify what compliance issues it was facing.
Aside from losing its only hospital, Boonville will lose a clinic and a rehab facility, devastating blows to the town of about 8,400 people.
“It will have an impact,” said Mayor Ned Beach. “It’s just an unfortunate thing.”
He said the hospital was generally well regarded in town, though rumors of financial troubles abounded in recent weeks.
People already travel to Columbia about 25 miles to the east for intensive surgeries or specialist care. But he said the loss of routine care from doctors and nurse practitioners in the clinic would be a major inconvenience. Before the closure, it was already hard to snag an appointment, he said, with appointment backlogs of as long as three or four weeks.
His voice raspy with a cold, Beach said it was the kind of thing that now will be hard to get treated locally.
“So, I got to go to Columbia to find a clinic to get what I need to fix my cold,” he said. “I probably won’t go. It’s 30 minutes over there, 45 minutes in the clinic and 30 minutes back.”
The mayor said it’s too early to tell whether other providers will help fill the void or to determine what will happen with the hospital’s real estate.
Pinnacle is based out of Overland Park, where it operates Pinnacle Regional Hospital and Blue Valley Surgical Associates. Those locations were not affected by the closure of the Missouri hospital, said Pinnacle spokeswoman Lori Davies.
The two Kansas facilities specialize in weight loss and spine and pain issues. The Boonville location, though, was a full-service community hospital.
“Rural hospitals are struggling right now with regulatory problems and reimbursement problems,” Davies said. “They are closing all the time and it’s unfortunate.”
The University of North Carolina reports that 162 rural hospitals have closed across the country since 2005. Last year 19 rural hospitals closed — the most closures in a year since 2005.
Davies said the Boonville hospital was struggling against a series of regulatory issues that would have been too costly to fix. She said doctors will staff the emergency room for the next 14 days, but she otherwise would not comment on the repercussions for employees.
A state spokeswoman would not provide details about recent inspection findings.
Davies said the hospital employed about 160 people in Boonville. Asked whether those workers would receive severance pay or other benefits, she said, “not that I’m aware of.”
Pinnacle CFO Dale Ferrell emailed employees Tuesday afternoon informing them that Wednesday’s bi-monthly payroll would be delayed. In the note obtained by The Star, he said cash flows over the holidays were “extraordinarily low,” but said the company was “optimistic paychecks will be available by Friday.”
This week, two employees in Boonville filed a class action suit against Pinnacle. They allege the company withheld funds for health insurance premiums for months without actually enrolling them in coverage.
A few days before the closure, Pinnacle announced that it would cease laboratory testing because of “regulatory issues.” In a Facebook post, the hospital said emergency medical services would divert patients away from its emergency department, though it remained open and would still offer medical screening exams and emergency stabilization.
But that Jan. 11 post said the hospital would not accept any new direct inpatient admissions.
Last week, the hospital was ordered to stop performing surgeries after a routine inspection found that the hospital’s sterilization room had problems with pressure, temperature and humidity, the Boonville Daily News reported. CEO Joe Conigliaro told the newspaper that the hospital hadn’t performed trauma surgeries for years — those patients go to Columbia. Pinnacle had performed mostly bariatric weight loss surgery and general operations like hernia repairs, the paper reported.
Pinnacle purchased the Cooper County Memorial Hospital in Boonville in October 2018. At the time, Pinnacle committed to continue providing all current health services. Boonville’s mayor said the county had little choice in selling the facility as it struggled financially.
Pinnacle is a privately held company owned by Douglas Palzer. In Overland Park, Pinnacle Regional Hospital employs about a dozen doctors at 12850 Metcalf Ave., according to its website. Formerly known as Blue Valley Hospital, that facility has has had its own run-ins with regulatory agencies.
In 2018, the Centers for Medicare and Medicaid Services pulled its certification, which deprived it of Medicare reimbursements — a move the hospital said could cripple it financially.
CMS made the decision after an inspection found the facility didn’t treat enough patients and wasn’t performing enough surgeries that require long stays to qualify for the higher Medicare reimbursements it had been receiving as an inpatient hospital.
In April 2018, the hospital sued the federal government in an attempt to prevent the loss of its Medicare funding. A U.S. District judge dismissed the lawsuit later in 2018.
According to federal inspectors, Blue Valley Hospital offered employee discounts on weight-loss surgery and asked workers to falsify records to try to pump up its inpatient numbers enough to continue getting Medicare money.
This story was originally published January 15, 2020 at 12:53 PM.
