The information, under Noble Health letterhead, arrived at 5:05 p.m. on a Friday, with the topic line: “Urgent Notice.” Audrain Community Hospital, Paul Huemann’s workplace of 32 years, was letting workers go.
Word travels quick in a small city. Huemann’s spouse, Kym, first heard the unhealthy information within the automobile when a good friend who’d gotten the letter, too, texted.
“Your termination was not foreseeable,” said the letter, dated Sept. 8 and signed Platinum Health Systems, including that the firing was everlasting “with no recourse” and that the “medical facility will be shuttered.”
“I don’t know what my next steps are,” mentioned 52-year-old Huemann, who supervised the laboratory on the Audrain hospital.
The future for the Huemanns, a whole bunch of different workers and 1000’s of sufferers in two small Missouri cities started to unravel lengthy earlier than that afternoon. The drama taking part in out in Paul Huemann’s hometown is acquainted to many who reside in rural America: Communities are so determined to maintain their hospital open that they are keen to gamble on any purchaser, together with these backed by personal fairness.
Sometimes they lose.
Noble Health, a three-year-old personal equity-backed startup, had acquired Audrain and close by Callaway Community Hospital through the pandemic. In March, it suspended all hospital providers and later furloughed 181 workers, state records present.
Noble — going through staggering debt, greater than a dozen lawsuits, and at the least two federal investigations — struck a deal to promote the hospitals in April to Platinum Neighbors, which is affiliated with Texas-based Platinum Team Management and Platinum Health Systems. In late June, Platinum asked Missouri officers to increase till Sept. 21 a deadline to reopen the hospitals.
On Tuesday, Platinum officers informed KHN that, “on behalf of Noble,” they requested Missouri regulators for a further 30-day extension “in an attempt to explore all alternatives for reopening these facilities,” Ryann Gordon, Platinum’s director of advertising, mentioned. “The backpay and health benefits of the employees is of utmost importance.”
Hours earlier than the licensing deadline Wednesday, Platinum submitted a request for a 90-day variance. Missouri laws don’t permit one other extension inside a year, mentioned Lisa Cox, a spokesperson for the Missouri Department of Health and Senior Services. So the state “worked with them” and granted the request, she mentioned.
Platinum mentioned the hospitals want time to finish building tasks. Audrain’s “emergency room area” has damaged home windows, and Callaway’s hospital wants “critical repair to the plumbing,” in line with the state approval letter. The hospitals can change possession through the 90 days, Cox mentioned.
Cory Countryman, president of Platinum Health Systems, confirmed the termination of the remaining hospital employees. “We are working with multiple partners to reopen the hospitals,” he mentioned.
That might contain a brand new proprietor. One prospect is Owen Shuler, a Georgia-based entrepreneur, who mentioned he is considering shopping for them. Shuler, who was reached by cellphone after he’d visited the agricultural communities, mentioned, “I love what I see.”
“It’s heartbreaking as to what has occurred,” mentioned Shuler, whose firms embody Bankers Realty Corp. and Shuler Capital Corp. If he purchased the hospitals, he mentioned, he would achieve this as managing director of his new enterprise, CareONE Global. “In terms of the due diligence, I do not like what I’m seeing and learning,” he mentioned. What he concluded from his evaluate is that “private equity and venture capital need to be kept the heck out of health care.”
On his LinkedIn profile, Shuler mentioned he “brings a lifelong perspective from a family owned skilled care business” in addition to experience in “telemedicine and healthcare services.”
Shuler, who confirmed the hospitals were saddled with substantial debt — “in the ballpark” of $45 million to $50 million — mentioned, “I am not prepared to go on the record about business strategy quite yet.” He mentioned his strategy can be “holistic” and embody telehealth. Many business leaders have argued telehealth is a option to convey high-quality medication to rural communities that may’t afford, and do not want, a full platoon of specialists on-site.
“Our target is acquiring hospitals in rural and disadvantaged areas and introducing our capabilities to them,” Shuler mentioned, including that fixing the 2 “basically broken” Missouri hospitals from the underside up can be “much easier than trying to go into a healthy system.”
Still, it is unclear whether or not Shuler or one other purchaser will come via and what it will take to reopen them after years of possession instability and monetary bother.
Venture capital and personal fairness agency Nueterra Capital launched Noble in December 2019 with executives who had by no means run a hospital, together with Donald R. Peterson, a co-founder who previous to becoming a member of Noble had been accused of Medicare fraud. Peterson settled that case with out admitting wrongdoing and in August 2019 agreed to be excluded for five years from Medicare, Medicaid, and all different federal well being packages, in line with the Health and Human Services Office of Inspector General.
Federal regulators didn’t block the acquisition wherein Peterson was concerned. “All ownership and managing control information is self-reported,” mentioned Centers for Medicare & Medicaid Services spokesperson Kristen Clemens.
Skimping on care
It did not take lengthy for issues to floor underneath Noble Health’s stewardship. Noble has accepted practically $20 million in federal COVID-19 reduction funds, together with $4.8 million from paycheck safety packages, in line with public data.
Yet doctors, nurses, and patients noticed proof that the brand new homeowners were skimping on providers — failing to pay for and stock surgical provides and medication. In Callaway, state inspectors decided that conditions in the hospital endangered patients. Former workers offered KHN payments and pay stubs they mentioned confirmed Noble had also stopped paying for worker well being, dental, imaginative and prescient, and life insurance coverage advantages.
After workers filed complaints about shock medical payments, the Department of Labor’s Employee Benefits Security Administration launched an investigation in early March, in line with a letter sent to the company and obtained by KHN. The division confirmed a second investigation by one other one of its divisions, Wage and Hour, into Noble’s administration of its Audrain hospital and clinic.
In April, Noble struck a deal to promote each hospitals for $2 and a stock switch to Platinum, which assumed all liabilities, according to the agreement. In a June 22 letter to state regulators in regards to the hospitals’ working licenses, Platinum mentioned, “We are requesting this continuance as Noble Health stock has been transferred to Platinum Medical Management.”
While visiting the hospitals in April, Countryman informed workers it was a “priority” to pay the again wages Noble owed them.
Neither Noble nor Platinum made good on that within the months since, workers contend. In addition to the federal investigations, 9 wage claims — the most important for $355,000 — have been filed in opposition to Noble in Kansas, in line with data provided via a Kansas Open Records Act request.
By early August, others were recognizing the worker complaints. Principal, which offered dental and imaginative and prescient care protection, sent letters to workers saying it will not demand that any employee repay advantages the insurer coated after Noble stopped sending premiums for worker protection. “This situation is not typical,” wrote Principal spokesperson Ashley Miller in an e mail.
Huemann, as laboratory supervisor, was among the many workers who weren’t furloughed within the spring. They reported for work each day within the hopes that the Audrain hospital would reopen. Huemann checked reagents and stored machines operational whilst money for provides was tight.
“We couldn’t get anything,” Huemann mentioned, “so we were living with what we had.”
Huemann, who offered pay stubs to KHN, mentioned he acquired a paycheck from Noble in late March. He mentioned he didn’t obtain one other paycheck till late May. He acquired common paychecks in June and early July. But his second July test, underneath Platinum, was per week late. His ultimate paycheck arrived Aug. 8 and was additionally late.
His final seven checks got here from three firms. They were all on Platinum’s watch: Initially Platinum Neighbors issued the checks, then Callaway County Community Hospital, and lastly Noble Health Audrain Inc.
“Everyone cashed their check as soon as they got it,” Huemann mentioned. “There are so many red flags. But you know, we’re at their mercy, we have no control, and we’re still thankful they are saving us.”
The test stubs additionally present the hospital’s operators deducted $1,385 in whole from Huemann’s pay for insurance coverage. The medical insurance coverage was alleged to be with Blue Cross and Blue Shield of Texas, however Huemann mentioned he by no means acquired a card and couldn’t affirm protection.
“I called four or five times on different days,” he mentioned. “They could never find me no matter how they looked me up, with Social Security or date of birth, or anything.”
Countryman referred all monetary inquiries to Platinum’s company workplaces. Ryan Cole, chief government of Platinum Team, didn’t straight reply to calls and emails looking for remark.
Some docs left city because the upheaval swallowed the hospitals.
Others, reminiscent of household medication physician Diane Jacobi and her nurse practitioner, Regina Hill, joined MU Health Care, affiliated with the University of Missouri, in Mexico, Missouri, the 11,000-person city the place Audrain Community Hospital is positioned.
Jacobi mentioned her sufferers need native care. “I don’t know if you’re a mama, but if you’re in labor, the idea that you have to spend 45 minutes in a car on the way to the hospital is nerve-wracking,” she mentioned. “It’s safer if you have care.”
Lou Leonatti, an legal professional who lives in Mexico, mentioned he feels so strongly that the group wants a hospital and emergency care that he offered loans final year to Noble so the company might meet payroll. Leonatti’s personal $60,000 mortgage, with an curiosity rate of about 3%, was due in January however, he mentioned, stays unpaid.
Leonatti helped begin Project Sunrise, an area financial improvement group. If a brand new settlement shouldn’t be reached, he mentioned, “we would like to have a Plan B available.”
Peterson, who helped launch Noble’s failed effort to show across the two Missouri hospitals, appears to have discovered his Plan B in Dubai. “I’m sitting in the Emirates Air lounge in Dubai marveling at the experience being afforded me at the tender age of 68,” he wrote on LinkedIn. “I’ll be in Riyadh for the next week finishing up due diligence on launching a new business there.”
The submit made Tonya Linthacum, a nurse practitioner who labored at Audrain’s most cancers screening heart for greater than 20 years, livid. She mentioned that he “destroyed a lot of people’s lives and livelihoods,” including that “to have someone dupe you like that” and “going on with no consequences. It’s just not the way the world is supposed to be.”
Peterson declined to remark.