August 30, 2018 10:52:42 AM
AMORY -- Three Mississippi hospitals, their physician practices and a Tennessee parent company are filing for bankruptcy, citing more than $70 million in debts.
Curae Health of Knoxville, Tennessee, filed for Chapter 11 bankruptcy reorganization in Nashville, Tennessee, on Monday. The nonprofit company owns Gilmore Memorial Hospital in Amory and Panola Medical Center in Batesville, while it leases Northwest Mississippi Regional Medical Center in Clarksdale.
Curae's Russellville Hospital in northwest Alabama is not seeking bankruptcy.
Curae plans to keep operating the Mississippi hospitals until it can sell them, CEO Stephen Clapp said in court papers. The company has 1,245 employees, who will continue to be paid during the bankruptcy proceedings, Clapp said.
Clapp added that past revenue and profits were high enough when Curae bought the hospitals in 2017 to pay off the money the company borrowed. But he said revenue declined and the hospitals faced higher-than-expected costs for electronic health records. He said the company saw a cash crunch, with vendors demanding payment for lagging bills, which sparked the bankruptcy filing.
The hospitals are the latest to struggle in Mississippi. Magee General Hospital filed Friday for Chapter 11. Five rural Mississippi hospitals have closed since 2013, while the North Carolina Rural Health Research Program says 87 rural hospitals have closed nationwide since 2010.
Curae closed a hospital in Haleyville, Alabama, in January.
Richard Roberson, Mississippi Hospital Association general counsel, told the Northeast Mississippi Daily Journal that other hospitals face the same stresses of declining reimbursements and rising costs for electronic health records and other equipment.
"Large hospitals are feeling the pressure," Roberson said. "But it's a more acute situation in rural hospitals."
Many rural hospitals are ceding control or are seeking alliances with larger urban hospitals, in part to share electronic record costs. The money-losing Greenwood Leflore Hospital, for example, is in a messy local political fight right now over whether to keep its independence or sign some sort of affiliation with the University of Mississippi Medical Center.
Curae sought to break that cycle with a nonprofit model that would allow the hospitals to not pay property and some other taxes, cutting operating costs. But Clapp said those expense reductions weren't enough.
Community Health Services of Franklin, Tennessee, which sold the hospitals to Curae, is owed $28.6 million. Curae owes ServisFirst Bank of Birmingham, Alabama, $18.8 million, while it owes $10.2 million to lender Midcap Financial of Bethesda, Maryland. The company says it has more than 1,000 creditors.
1. Citizens, mayor plead to keep Fred's open COLUMBUS & LOWNDES COUNTY
2. Keenum: No plans to close T.K. Martin Center STARKVILLE & OKTIBBEHA COUNTY
4. Chase, crash in north Columbus ends in one arrest COLUMBUS & LOWNDES COUNTY
5. Three CPD officers accept promotions with no raises COLUMBUS & LOWNDES COUNTY