Hillsboro Hospital foreclosed on, thwarts power being turned off

Hillsboro Community Hospital narrowly escaped a utility shut off last week just days after being listed as a defendant in a petition filed in the Marion County District Courthouse. A last minute resolution came when the utility bill, with an original total of around $28,000, was paid in full.

While the hospital staff had prepared to run the hospital on a generator should the shut off happen, the clinic and other aspects of the facility would not have been fully operational.

But for now, business can continue as usual. At least until further developments with the pending lawsuit.

The Bank of Hays filed a petition to foreclose on the Hillsboro Community Hospital property on Tuesday, Jan. 8 at 9:45 a.m.

In 2015, the bank issued a $9.7 million construction loan for the hospital. According to the lawsuit, the bank is requesting the full amount of the loan plus interest and late fees be paid on the debt. If the principal is not paid within 14 days of a judge’s ruling on the matter, the bank asks in the lawsuit that the property be sold to settle the debt.

According to the lawsuit, the bank held both the mortgage to the hospital property and all of the assets in the building.

The lawsuit also lists the City of Hillsboro, Kan.; Public Building Commission of Hillsboro, Kan.; APP Group International, LLC; and the Board of County Commissioners for Marion County as defendants in the lawsuit.

The City of Hillsboro has been listed as a defendant due to the lease agreement with the Public Building Commission of Hillsboro, Kan. The lawsuit cites that the city may claim some interest in the property, depending on the outcome of the case.

The Board of County Commissioners for Marion County has been joined to the lawsuit because of $300,000 in unpaid real property taxes on the property.

City of Hillsboro Administrator Larry Paine said he was unable to comment. He directed the Free Press to Attorney Tyler Heffron of Tripplett, Woolf and Garretson in Wichita. Heffron was retained on the case Tuesday. Heffron said he was unable to comment as well.

As previously reported, the Bank of Hays has been in frequent communication with the City of Hillsboro and the hospital since issues with the hospital’s parent company being able to make payroll began.

While the bank needs to sell the property in order to recoup their losses, it is in its best interest to sell to a medical group of some sort ,which keeps losses lower for all involved. The City of Hillsboro also benefits if a medical group takes over.

Health Acquisitions Company is the Kansas City, Mo., company that the City of Hillsboro has been working with regarding utility pay off. One of the defendants listed on the petition is CAH Acquisition, which, according to an Aug. 19, 2018, article in “The Oklahoman,” is part of HMC/CAH Consolidated, a Kansas City, Mo., company that owns multiple hospitals in multiple states.

According to a “St. Louis Record” article on Sept. 3, HMC/CAH Consolidated has been linked to HAC, Empower and Jorge Perez, which are all involved in other lawsuits similar to the one filed in Marion County on Tuesday.

During most of the week, the Empower HMS website showed an account suspended message. Jorge Perez had also been pulled off of an ihealthcare website that he was formally listed on. The Empower HMS website is now back up, but no one answered the call or returned the call when the Free Press left a message.

The City of Hillsboro made the decision to shut off the power after meeting in executive session on Tuesday. While half of the bill had been paid, the rest remained outstanding at the time.

The city communicated with the hospital and outlined items to be covered before the shut off was scheduled to occur. One item was the test of the generator which was performed Thursday morning by hospital maintenance while city officials observed.

“We did have the test this morning, and it was successful. It actually required less energy to run all of the systems of the hospital than we originally thought. It went really well,” said Jessi Workman, currently the highest administrator at the hospital. “The generator can run indefinitely as long as we keep filling it with gas. All of the systems are a go, and we can maintain a fully functioning hospital.”

Workman went on to say that the City of Hillsboro has been very helpful and the city indicated in a conversation with her earlier this week that they have no intention of causing harm to the hospital.

“We are all doing the best that we can,” Workman said.

Around 11:30 a.m. on Friday morning, roughly 30 minutes before the scheduled shut off, the City of Hillsboro issued a press release that the HCH’s power would remain on due to a last minute resolution that had the unpaid utility bill of $16,644.31 owed to the City of Hillsboro paid off.

In the press release, the city said it is their ongoing desire to undertake reasonable steps to assist in keeping the hospital open while also being a good steward of the city’s finances and utility resources.

The press release also said, “ As these matters involve currently pending legal action, the city will have no further comment on this matter.”

While the press release did not state who paid off the remaining balance, the hospital indicated that it was Empower. But it is not clear if they are paying off their other debts.

“The utility bill payment by Empower was received by the city this morning,” said Workman. “I don’t have any information regarding the foreclosure or any litigation at this time.”

For now, the hospital is continuing on as usual. The most recent crisis adverted seems to have raised spirits of all involved. But all are aware that nothing has been settled yet. Until then, the staff at HCH will continue to be there to help anyone who needs it.

“This is a difficult situation for the hospital. I know many people are working hard to ensure we are able to care for our patients and that we don’t have any interruption in services,” said Workman. “I want everyone in the community to know that the hospital is open and fully operational. There is no intention to close or change the services we offer.

More from Laura Fowler Paulus
Hospital has a new potential buyer
After a long time of not much news outside of lawyer fees...
Read More