Hospital layoff raises more questions from public

The layoff of 43 employees at Northeastern Health System Sequoyah (NHSS) last week has prompted some other concerns and questions by the public.

Two particular questions raised concerned a recent loan the hospital received and delayed billing.

Mark McCroskey, vice president of operations for Northeastern Health System (NHS) in Tahlequah, said back in July 2017, the hospital had a cash balance of a negative $80,000. NHS helped the hospital secure a $4 million loan to refinance the hospital's $1.8 million line of credit and provide $1.7 million in outstanding payroll taxes and accounts payable, most of which was greater than 90 days.

Last year, the Sequoyah County – Sallisaw Hospital Board of Trustees approved a resolution for the $4 million loan application, which was approved by the Sallisaw Board of Commissioners at a subsequent meeting.

At that time, CEO Julie Ward told the board the hospital was facing some serious issues that needed to be addressed. She said the hospital is struggling significantly and that the loan would allow the hospital to stabilize cash flow, pay down debt and improve facilities, while adding new services.

She said at the time, the hospital could file bankruptcy and start over or use the loan to balance things out.

Plans discussed at that time included putting in three ICU beds to add technology equipment such as a nuclear camera and 3-D mammography and MRI testing equipment.

McCroskey said last week it is in the planning stage to remove some inpatient rooms from service and remodel them. “This phase will allow for the rooms to undergo enhancements that will bring them up to regulations for higher level acuity patients, as well as, allow for technology (echocardiogram, nuclear medicine and in-house MRI) to be acquired and placed in these rooms,” he said. He said the hospital has already purchased the mammography machine and it is on site.

McCroskey said the hospital has not been profitable for many years, losing over $7 million over the last five years.

As another source of revenue, the hospital receives a .5 percent sales tax assessment that was approved by the City of Sallisaw Board of Commissioners back in 1978, which, at the time, was restricted for capital improvements and debt service. That has since been approved for other uses by the city commission. The sales tax has no expiration date.

Since the layoff last Friday, some former patients of the hospital have reported receiving bills from the hospital for medical expenses that were incurred last year, some as long as a year ago.

“We have had some delay in private pay billing that began well before NHS became involved,” McCroskey said. “We have been offering a significant discount on bills in an effort to clean up the patient accounts. Even in the best conditions, the medical billing process is slow with many barriers to payment. If the patient has more than one form of insurance, this will further delay the bill for the patient's portion.”

Last week, the hospital laid off 43 employees, offering 23 of those employs an opportunity to transfer to NHS in Tahlequah. Those layoffs were effectively immediately (April 5). All departments throughout the hospital were affected and the laid off employees were given a $500 severance, McCroskey said, adding that the layoffs would save the hospital about $1.6 million annually.

Sequoyah County Times

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