Health Care

KC-based hospital company pays up at 11th hour to keep lights on at Kansas facility

A hospital management company based in North Kansas City paid its power bill for a facility in Kansas Friday morning, narrowly averting an electrical outage.

But financial challenges remain for the hospital and 13 others managed by EmpowerHMS, 1700 Swift Street.

The City of Hillsboro, which owns the utilities for the town, said in a news release that Empower paid its remaining balance of $16,644.31 after the city threatened to shut off electricity at Hillsboro Community Hospital at noon Friday.

“Accordingly, the presently noticed utility shut-off at the hospital has been averted,” the news release said. “It is the city’s ongoing desire to undertake reasonable steps to assist in keeping the hospital open, while also being a good steward of the city’s finances and utility resources.”

The hospital is still in foreclosure proceedings in Marion County court.

Hillsboro, a town of about 3,000 people north of Wichita, is one of 14 communities where Empower manages the local hospital’s day-to-day operations. Most of them are in Kansas, Missouri or Oklahoma.

Signs of financial stress at those hospitals have been compounding lately.

Employees throughout the chain reported getting paychecks a week late in December. Some said they were also running low on supplies, or having trouble with their health insurance. City leaders in Hillsboro and other towns have reported that Empower is months late on rent and utility bills.

The EmpowerHMS website briefly went down Thursday, with a message saying its account had been suspended and it should contact its web hosting provider for further details.

Empower executives have not responded to repeated requests for comment, and the office in North Kansas City is almost empty. Mike Murtha, a spokesman for a rural hospital nonprofit chaired by Empower CEO Jorge Perez, has said most of the jobs were moved to Miami, but Empower intends to keep managing its Midwest hospitals.

Murtha has said repeatedly the financial issues are temporary and should resolve later this month or next month as increased federal reimbursements kick in.

Empower bills itself as a savior of rural hospitals, which are facing financial headwinds nationwide. But Perez and other Empower leaders are under investigation in Missouri for a lab billing operation they allegedly ran through Putnam County Memorial Hospital in Unionville, which is no longer affiliated with them.

Rural critical access hospitals get paid more for performing the same tests as free-standing labs. Missouri State Auditor Nicole Galloway said lab revenue rose astronomically at Putnam County after another Perez-affiliated company took over, leading her office to question whether the hospital possibly could have performed all the tests, or whether it was being used as a shell to funnel bills through.

Perez was also an executive in a company accused of running a similar scheme in Florida, at a hospital that went bankrupt. A pending lawsuit brought by a Mission Hills couple with an investment stake in 10 of the Empower hospitals alleges that he and others wanted to use those hospitals as lab billing shells as well.

Perez and the other defendants say the suit is baseless and have disputed Galloway’s findings.

She passed the audit report on to the Missouri Attorney General’s office, which is still investigating to determine if anyone broke the law.

The Hillsboro news release noted that the Bank of Hays filed this week to foreclose on the hospital due to late mortgage payments, leaving its future still in doubt. The building is owned by an Empower affiliate, CAH Acquisition Company, and the foreclosure filing says the company is on the hook for almost the entire $9.7 million bank loan, plus about $180,000 in interest and $125 in late fees if it wants to keep the hospital.

It also said the hospital has more than $300,000 in unpaid property taxes in Marion County, reflecting three years worth of payments not made.

The City of Hillsboro is named as a respondent in the foreclosure proceedings, because a public building commission it set up owns the land under the hospital.

“This week the city engaged the law firm Triplett Woolf Garretson, LLC, to represent it relative to the foreclosure lawsuit and the difficult challenge presently facing the hospital,” the city’s news release said.

Larry Paine, Hillboro’s city administrator, said the lawyers had advised him not to comment further.

The EmpowerHMS hospitals are: Hillsboro Community Hospital (Kan.), Horton Community Hospital (Kan.), Oswego Community Hospital (Kan.), Fulton Medical Center (Mo.), I-70 Community Hospital (Mo.), Lauderdale Community Hospital, (Tenn.), DeQueen Medical Center (Ark.), Prague Community Hospital (Okla.), Fairfax Community Hospital (Okla.), Haskell County Community (Okla.), Drumright Regional Hospital (Okla.), Latimer County General (Okla.), Washington County Hospital (N.C.), Regional General Hospital Williston (Fla.).

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Kansas City Star health reporter Andy Marso was part of a Pulitzer Prize-finalist team at The Star and previously won state and regional awards at the Topeka Capital-Journal and Kansas Health Institute News Service. He has written two books, including one about his near-fatal bout with meningitis.