Now that the hospital sale process is coming closer to completion and sale documents have been signed, I want to give the citizens a chance to know what we as supervisors know about the hospital finances moving forward.

The weekly 26 week projection reports produced by our independent accountants, the Horne Group, indicate NRMC has paid down nearly all its $3.5 million line of credit at United Mississippi Bank since March.  Horne forecasts the line of credit remaining low. At the time of the sale, the county will receive $18 million dollars from Community Health Systems, CHS, the buyer. This includes $10 million, which is the sale price, and $8 million in prepaid taxes.

The final closing date is  projected to be by the end of the year. Horne and our consultants estimates that in conjunction with the sales price we will have an estimated $5 million dollars in savings, accounts receivable and in bond escrow to pay off all creditors, consultants and legal expenses.

After the sale, the bankruptcy court must enter an order declaring repayment. Our hospital legal counsel advised that typically administrative expenses are paid first, including legal expenses, which have not yet been finalized, but I assume will be massive. Then, all outstanding bonds will be paid, which are estimated just over $14 million dollars. Then, the UMB line of creditor will be paid. Next all creditors will be paid who have outstanding debt since the petition for bankruptcy was filed on March 24, 2014. Then, repayment will be made to all outstanding creditors prior to the March 24 bankruptcy petition.  After the sale, we will set aside approximately $4 million into escrow, from the pre-paid tax payments, for any malpractice or RAC audits which may arise after the sale. These escrow funds will stay for a period of two years then the escrow funds will be used to pay off any remaining creditors before all remaining funds will be returned to the county. The good news is we have been advised  that all creditors should be paid in full; the bad news is very little remaining funds, if any, will be left to be returned to the county.

While the sale process still must go through a formal bidding process, there is an opportunity for any outside hospital to bid before the sale is final. This is very unlikely. At the time of the sale, CHS will receive all assets and control of the hospital and the land on which the hospital sits.

I don’t think any member of the board of supervisors looks at this as a victory or positive experience for NRMC, but a necessary one.

It is clear we could no longer survive as a stand-alone county hospital under our current conditions or operations. I look forward to the prospect of a unified health system here that can hopefully grow to provide a wider array of healthcare providers and expanded services to our region. CHS is a very exciting company with the liquidity and credentials to expand and improve our healthcare, including bringing more physicians into this area.

Finally, I once again thank our dedicated and caring team of medical professionals that have kept NRMC going through these difficult times. These nurses, doctors and members of the medical community have stayed strong through this process. Everyone in our community should be grateful for the service they provided in the past and continue to provide to all our citizens.

 

David Carter is an Adams County supervisor.