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New US hospitals face financial crisis over COVID aid money

THOMASVILLE, Ala. (AP) — A whole city celebrated in 2020 when, at the onset of the coronavirus pandemic, the Thomasville Regional Medical Center opened, offering cutting-edge medicine previously unavailable in a poor, remote part of Alabama. The timing for the ribbon-cutting seemed perfect: new treatments would become available in an underserved area just as a global health crisis was unfolding.

Ultimately, the same timing could be the reason for the hospital’s demise.

Now stuck deep in the red, the $40 million, 29-bed hospital with a soaring, sun-drenched lobby and 110 employees is among three medical centers in the United States that say they’re helping with the federal Pandemic Millions are missing out on aid because facilities are so new they lack full pre-crisis financial reports to show how much it cost them.

In Thomasville, in the wooded area about 153 kilometers north of the Port of Mobile on the Gulf Coast, hospital officials have worked for more than a year to convince federal officials that they shouldn’t have gotten $8.2 million through the CARES Act, only $1 million they got. With a total debt of $35 million, the search grows more urgent every day, said Curtis James, the chief executive officer.

“No hospital can sustain itself without getting the CARES Act money that everyone else got,” James said.

Staff are trying to save money by cutting back on supplies, but residents, including Judy Hutto, are worried about the hospital’s future. Hutto recently drove there 15 miles (24 km) in the country from her home for tests.

“The area needs it,” she said. “It’s a nice hospital.”

CEO Barry Beus is also trying to fill a gap at Rock Regional Hospital south of Wichita in Derby, Kansas. The hospital is due up to $15.8 million, officials said, but since it only opened in April 2019 and there are no full pre-pandemic financial reports, it has received just over $985,000.

The only thing that has saved the facility from financial ruin so far is the cooperation of doctors, contractors and vendors who have not pushed for payments, he said. “If we lose her, we lose the hospital,” said Beus.

Three Crosses Regional Hospital opened in Las Cruces, New Mexico, in 2020 and has racked up a $16.8 million loss in just three quarters while receiving just $28,000 in aid, said Landon Fulmer, a lobbyist from Washington, who is working with all three hospitals to raise additional funds. Any facility is penalized for being new despite providing the same costly COVID-19 care as other medical centers and has lost revenue from other procedures, including elective surgeries, he said.

“It’s really quite a strange situation that shouldn’t have happened,” Fulmer said.

With about 420,000 health care providers nationwide already receiving assistance from a $178 billion pot, the government isn’t covering 100% of anyone’s losses, said Chris Lundquist, a spokesman for the US Health Resources and Services Administration, which oversees the program.

“The HRSA has strived to provide as much assistance as possible to as many hospitals as possible within the law and funding,” he said. The agency said it used proxy financial information for hospitals that opened in 2019 or 2020 to create an equitable payment system.

“They got all the funding,” Lundquist said.

While virtually all aid funds are on appeal, Lundquist said hospitals seeking additional aid can go through an appeals process. Hospitals may also apply for an additional appropriation or funding in coming fiscal years, he said. All three hospitals say they are making more money.

Officials in Thomasville are trying to exploit Congressional influence. Mayor Sheldon Day has made several trips to Washington, DC to speak with members of the state’s congressional delegation and health officials, and Alabama Hospital Association President Dr. Don Williamson has asked the White House for help.

“They were assured that they would be taken care of. But the fact of the matter is, if you deal with government agencies before you have the money, you don’t have the money,” Williamson said.

Thomasville is located in southwest Alabama in an impoverished area called the Black Belt. About 70% of black belt residents are eligible for Medicare or Medicaid, and healthcare has been limited for generations.

The last hospital in Thomasville closed more than a decade ago, leaving only hospitals in the surrounding area offering fewer services. Officials have worked for years to secure a new hospital so residents don’t have to drive 90 minutes to get high-tech services like digital imaging, full surgical options, echocardiograms, 3D mammography and more.

Through a partnership between the city and a local health agency, Thomasville Regional secured federal funding from the Department of Agriculture and opened March 3, 2020 before cases of COVID-19 caught fire in the rural South.

“We thought we were off to a good start,” said James, the general manager. “And then everything shuts down.”

Patients stopped showing up for scans, elective surgeries, mammograms and other money-making services due to pandemic shutdowns, and financial statements that looked promising turned dangerous in a matter of weeks.

Recognizing that new hospitals couldn’t calculate COVID-19 losses because they couldn’t compare 2020 numbers to previous years, Health and Human Services allowed hospitals to use budget figures for calculations in lieu of previous financial statements. That’s how the hospital found it had missed out on more than $7 million in aid, James said.

While the hospital is still awaiting that help, he said the government has agreed to provide $1 million in assistance that went to all other hospitals.

“That was fine, but other hospitals in our area got $8 million, $9 million,” he said.

Birmingham-based Medical Properties Trust recently gave the hospital $2 million, and James said executives are confident Thomasville Regional will eventually receive the additional federal aid. “But it will take time,” he said.

Like Thomasville Regional, Rock Regional in Kansas saw sales drop shortly after it opened, CEO Beus said. There are still staff shortages due to the pandemic and there is a premium to be paid for traveling nurses who work shifts on the wards, he said, while working with advisers and members of Congress who are just trying to stay afloat.

“It was a little frustrating,” he said.

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The Associated Press Health & Science Department is supported by the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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