News Alert: Rural Tennessee hospital shuttered amid reported financial woes

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Original story posted on: June 14, 2019

Two nearby rural facilities with the same owner remain open amid the crisis.

A troubled rural Tennessee hospital has been forced to close.

As reported by RACmonitor Thursday, local reports today indicate that Jamestown Regional Medical Center in northern Tennessee had its doors locked as of Thursday evening, with a sign at the entrance noting that the closure is expected to be temporary.

Two weeks ago, The Tennessean reported that federal authorities announced that they were suspending Medicare and Medicaid payments to Jamestown Regional as of Wednesday, June 12 because it was “so woefully broke that it cannot pay its employees, its vendors, or even keep the lights on.” The largest Nashville-area newspaper reported that portions of the 85-bed hospital recently lost power because a $33,000 electricity bill had not been paid; that officials had reported net losses of more than $4.7 million over the past three years; and that the hospital had been low on supplies and stopped admitting patients transported by ambulance.

At least one doctor reportedly recently quit his job at the hospital because he felt the situation was “unsafe,” and federal officials also even alleged that the hospital had withheld taxes from employees’ paychecks, but then kept the money instead of paying it to the government.

“Reimbursement is a major funding source for any hospital, so termination is likely a death knell for a hospital that was already in a desperate situation,” the report read.

The closure was mentioned in Becker’s Hospital Review CFO newsletter distributed via email Friday, with notice that Michael Alexander, who began serving as CEO of Jamestown Regional on Monday, June 10, told a local TV station that he is trying to get the hospital’s federal funding reinstated. When he accepted the job, neither he nor Rennova Health, the West Palm Beach, Fla.-based company that owns the hospital, reportedly knew that the Medicare and Medicaid dismissal was imminent.

Another local newspaper, the Independent Herald, noted that the embattled hospital’s closure came less than a week after Rennova announced it was laying off 20 of 140 employees at the facility. An email the paper sent to a Rennova spokesperson seeking clarification on the closure was not immediately answered; according to an automated reply, the spokesperson was out of the office for the week.

“Exactly four weeks earlier, the hospital was apparently just hours away from closing, before an 11th-hour change of plans. The publicly stated reason for the near-closure was an ultimatum from the federal Centers for Medicare & Medicaid Services (CMS) that the hospital close or be forced to close, due to unpaid taxes,” the Independent Herald report reads. “However, a CMS spokesperson later told the Independent Herald that the agency does not force hospitals to close their doors. No further explanation for the near-closure was ever given.”

Rennova reportedly expressed confidence that the situation is salvageable, but optimism wasn’t palpable.

“We recognize that JRMC is an integral part of the community,” Rennova said in a terse statement. “We look forward to filling the healthcare needs of our customers and the long-term success of the hospital to serve the needs of the community.”

The closest major hospital to Jamestown Regional appears to be Livingston Regional Hospital, approximately 45 minutes away. There are also Rennova-owned hospitals in Oneida and Jellico, towns of similar size to Jamestown (several thousand residents), but they are closer to an hour and 90 minutes away, respectively.

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Mark Spivey

Mark Spivey is a RACmonitor contributor who has been writing and editing articles about federal oversight of healthcare for nearly a decade. He can be reached at mcspivey@hotmail.com.

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