On a Friday at 5:05 p.m., news bearing the Noble Health letterhead and bearing the title “Urgent Notice” came.
Paul Huemann was laying off staff at Audrain Community Hospital, where he had worked for 32 years.
Small towns have rapid communication. When a friend who had also received the letter contacted Huemann’s wife, Kym, she learned the dreadful news for the first time in the vehicle.
The letter, dated September 8 and signed Platinum Health Systems, said that “Your termination was not anticipated,” that it was a permanent dismissal “with no appeal,” and that the “medical facility would be closed.”
Huemann, who oversaw the lab at the Audrain hospital, said, “I don’t know what my future actions are.
Long before that day, everything started to go apart for the Huemanns, hundreds of other employees, and thousands of patients in two tiny Missouri communities. Many people who reside in rural America are acquainted with the scenario now taking place in Paul Huemann’s hometown: Communities are so anxious to keep their hospital running that they are ready to risk on any bidder, even ones supported by private equity.
They sometimes lose.
During the pandemic, Noble Health, a three-year-old company backed by private equity, bought Audrain and the neighbouring Callaway Community Hospital. According to state records, it stopped providing any hospital services in March and then laid off 181 workers.
Noble agreed to sell the facilities to Platinum Neighbors, a company connected to Texas-based Platinum Team Management and Platinum Health Systems, in April despite being burdened by massive debt, more than a dozen lawsuits, and at least two government investigations. Late in June, Platinum requested that the deadline for reopening the facilities be extended until September 21.
Platinum’s director of marketing, Ryann Gordon, told KHN on Tuesday that the company has petitioned Missouri authorities for a further 30-day extension “on behalf of Noble” in order to “examine all possibilities for restarting these facilities.” “The workers’ back pay and health benefits are of the highest significance.”
Wednesday’s licence deadline was hours away, so Platinum put in a request for a 90-day extension. According to Lisa Cox, a spokeswoman for the Missouri Department of Health and Senior Services, state statutes prohibit receiving a second extension within a calendar year. As a result, she said, the authorities “worked with them” and approved the request.
According to Platinum, hospitals need time to finish building projects. According to the state permission letter, Callaway’s hospital requires “urgent repair to the plumbing,” while Audrain’s “emergency room portion” has shattered windows. During the 90 days, Cox noted, the ownership of the hospitals may change.
The firing of the remaining hospital workers was verified by Cory Countryman, president of Platinum Health Systems. He said, “We are collaborating with several partners to reopen the hospitals.
That may entail a new owner. Entrepreneur from Georgia named Owen Shuler is one potential customer who claims to be considering purchasing them. After visiting the rural areas, Shuler answered the phone and stated, “I love what I see.”
Shuler, whose businesses include Shuler Capital Corp. and Bankers Realty Corp., described the events as “heartbreaking.” He said that if he decided to purchase the hospitals, he would do it as managing director of his brand-new company, CareONE Global.
I don’t like what I’m seeing and learning when it comes to the due diligence, he added. After doing his assessment, he came to the conclusion that “private equity and venture money ought to be kept the hell out of health care.”
Shuler claimed on his LinkedIn page to have knowledge in “telemedicine and healthcare services” and to “offer a lifetime perspective from a family run skilled care firm.”
Despite confirming that the hospitals are “in the range” of $45 million to $50 million in debt, Shuler added, “I am not yet willing to speak on the public regarding business strategy.”
He said that his strategy will be “holistic” and include telehealth. Many business executives have suggested that telehealth can provide high-quality healthcare to remote areas that cannot afford or need a whole platoon of experts on-site.
The two “essentially damaged” Missouri hospitals would be “far simpler to restore from the ground up than attempting to go into a good system,” Shuler said, adding that “our aim is purchasing hospitals in rural and disadvantaged regions and providing our skills to them.”
However, it is still unknown if Shuler or another buyer would follow through and what it would take to reopen them after years of turbulence in their ownership and financial situation.
In December 2019, the venture capital and private equity company Nueterra Capital established Noble with executives who had never been in charge of a hospital, including Donald R. Peterson, a co-founder who had previously been charged with Medicare fraud.
According to the Health and Human Services Office of Inspector General, Peterson reached a settlement in that matter without admitting any wrongdoing and agreed to be barred from Medicare, Medicaid, and all other federal health programmes for five years in August 2019.
Federal officials did not obstruct Peterson’s involvement in the deal. According to Kristen Clemens, a representative for the Centers for Medicare & Medicaid Services, “all ownership and managerial control information is self-reported.”
Sacrificing care
Immediately after Noble Health took over, issues started to appear. According to public documents, Noble has taken close to $20 million in federal COVID-19 relief monies, including $4.8 million from programmes that safeguard employees’ paychecks.
But medical professionals, nurses, and patients saw signs that the new owners were cutting corners by neglecting to buy and store medications and surgical supplies. State inspectors in Callaway found that the hospital’s conditions put patients in danger. The KHN bills and pay stubs that former employees provided purportedly showed Noble had also stopped covering employee health, dental, vision, and life insurance benefits.
Early in March, the Employee Benefits Security Administration of the Department of Labor began an inquiry after workers complained about receiving unexpected medical bills, according to a letter addressed to the business that KHN was able to access. The department acknowledged a second inquiry into Noble’s administration of its Audrain hospital and clinic by one of its departments, Wage and Hour.
According to the agreement, Noble and Platinum reached a deal in April to sell both hospitals for $2 and a stock transfer, with Platinum taking on all obligations. “We are asking this extension since Noble Health shares has been transferred to Platinum Medical Management,” Platinum Medical Management said in a letter dated June 22 to state authorities about the hospitals’ operating licences.
When Countryman visited the hospitals in April, he informed the staff that paying the back salaries Noble owed them was a “priority.”
Employees claim that neither Noble nor Platinum followed through on it in the following months. According to information obtained via a Kansas Open Records Act request, nine wage claims, the biggest for $355,000, have been made against Noble in Kansas in addition to the federal investigations.
Others began to notice the staff concerns in early August. After Noble ceased delivering premiums for employee coverage, Principal, which supplied dental and vision care coverage, addressed letters to employees stating that it would not require any workers to return services the insurance paid. Ashley Miller, a representative for the Principal, said in an email that “this circumstance is not common.”
Huemann, who oversaw the lab, was one of the employees who wasn’t furloughed in the spring. In the hopes that the Audrain hospital would reopen, they came to work each day. Despite having little money for supplies, Huemann tested reagents and kept equipment running.
Huemann recalled, “We were making do with what we had because we couldn’t acquire anything else.”
Huemann, who gave pay stubs to KHN, said that Noble paid him in late March. He said that his next payment didn’t come until the end of May. He got his normal wages in June and the first part of July. However, his second July check from Platinum was sent a week late. On August 8, he received his last check, which was likewise tardy.
His three most recent checks totaled seven. The cheques were first written by Platinum Neighbors, followed by Callaway County Community Hospital, and subsequently Noble Health Audrain Inc.
As soon as they received their checks, everyone cashed them, according to Huemann. “There are a lot of warning signs. But even though we are helpless and at their mercy, we are nonetheless grateful that they are rescuing us.”
The check stubs also reveal that a total of $1,385 in insurance deductions were made from Huemann’s compensation by the hospital staff. Blue Cross and Blue Shield of Texas was meant to provide the medical insurance, but Huemann said he never got a card and was unable to verify coverage.
He said, “I phoned four or five times on various days. No matter how they searched me up—using my Social Security number, birthdate, or anything else—they could never locate me.
Countryman directed any inquiries about money to Platinum’s corporate headquarters. Platinum Team’s CEO, Ryan Cole, did not immediately return calls or emails requesting comment.
“Nerve-wracking”
As the chaos engulfed the hospitals, several physicians fled the city.
Others, including the family physician Diane Jacobi and her nurse practitioner Regina Hill, joined the MU Health Care organisation in Mexico, Missouri, the 11,000-person town where Audrain Community Hospital is situated. MU Health Care is a part of the University of Missouri.
Patients desire local treatment, according to Jacobi. I don’t know whether you’re a mother, but if you’re in labour, the thought of having to spend 45 minutes in a vehicle to go to the hospital is terrifying, she added. “If you take care, it’s safer.”
Lou Leonatti, a lawyer who resides in Mexico, claims he is so certain that the area needs a hospital and emergency treatment that he last year gave loans to Noble to help the business pay its employees. Leonatti’s personal loan of $60,000 with a 3% interest rate was due in January but, according to him, is still outstanding.
A neighbourhood organisation for promoting economic growth was founded by Leonatti. We would prefer to have a Plan B accessible, he remarked, in the event that a new deal cannot be achieved.
Peterson, who assisted Noble in beginning his unsuccessful endeavour to turn around the two Missouri hospitals, seems to have discovered his backup plan in Dubai. He posted on LinkedIn, saying, “I’m sitting in the Emirates Air lounge in Dubai marvelling at the experience being offered to me at the early age of 68.” “I’ll be completing up due diligence on opening a new firm there in Riyadh over the next week.”
Tonya Linthacum, a nurse practitioner who spent more than two decades working at Audrain’s cancer screening clinic, was incensed by the post. She said he “destroyed many people’s lives and careers, and it was “going on with no repercussions” to have someone take advantage of you in such a way. Simply said, that’s not how the world is intended to work.”