The CMS is cutting off Medicare payments to a rural Tennessee hospital that has racked up more than $4 million in unpaid bills, lacks key supplies and is keeping money from employees' paychecks.
In a letter to Jamestown Regional Medical Center's interim CEO provided to Modern Healthcare, an agency official wrote the termination is based on the hospital's failure to comply with the conditions of participation. A separate inspection shows money mysteriously missing from employees' paychecks, the hospital's unpaid bills are growing, and it lacks key supplies, such as blood, drugs and IV fluids.
Interviews with multiple hospital employees conducted in a May 14 inspection of the hospital found that no Social Security payments had been made on their behalf since June 2018, the same month West Palm Beach, Fla.-based Rennova Health bought the hospital. That's despite the fact that money purportedly going to Social Security had been withdrawn from each paycheck.
The latest inspection also found the hospital now owes $4.1 million to 216 vendors—up more than $1 million since the last inspection on Feb. 5.
The hospital's pharmacy director told CMS inspectors the facility's pharmacy vendors, Cardinal Health and Baxter, had not delivered drugs or IV fluids for the past 19 days due to lack of payment. Siemens is no longer delivering laboratory supplies to the hospital due to lack of payment, the inspection found.
The hospital's blood bank vendor, Blood Assurance, now requires payment at each weekly delivery. It had not delivered in the week before the inspection. The laboratory director revealed the hospital lacks the supplies to perform a test for proteins in the blood or to measure the amount of a certain antibiotic in the blood.
The CMS' termination takes effect on June 12, which means the Medicare program will not pay for services provided on or after that day. For patients admitted before June 12, payment may continue for up to 30 days of inpatient services, according to the agency's letter, from Linda Smith, associate regional administrator of the CMS' division of survey and certification.
Hospital leaders told CMS inspectors in earlier visits that the problems were due to a computer system switch that had delayed payments, but the problems apparently run much deeper. The latest inspection found the facility still lacks an annual operating budget and a governing body.
In the latest visit, the CMS learned the hospital owes Community Health Systems Professional Services Corp., a unit of its former owner, about $450,000 for billing services in 2018. It owes its contracted emergency department physicians' vendor, EmCare, almost $400,000. It also owes a contracted wound-care and hyperbaric treatment center about $400,000.
The hospital has racked up bills to several vendors, including $241,300 to its accounts receivable billing vendor, $181,000 to pharmaceutical vendor Cardinal Health and $84,000 to Siemens. It owes its blood bank vendor about $15,600 and its skin graft vendor $25,500. It owes its primary medical supply provider, Owens and Minor, about $26,600 and smaller amounts to an electricity company, a postage meter vendor and an IV fluid vendor.
The facility's leadership has set up a payment plan with the Internal Revenue Service for unpaid income taxes, according to the report.
The hospital has set up payment plans with six vendors and took out a $500,000 bridge loan, according to the inspection report. It has also applied for another $30 million loan that is still in underwriting.
Electricity to the hospital was shut off between April 30 and May 2. It was turned back on when the hospital paid the utility company $33,200, according to the inspection report.
Interviews with hospital staff members detailed money being withheld from paychecks for the federal government that was never deposited into Social Security accounts. A phlebotomist said she had attempted to start withdrawing from the federal program but was told she had not made payments since June 2016, despite money having been withheld from each paycheck. A nurse told CMS investigators the hospital had withheld money from her paychecks supposedly for Social Security taxes. But when she checked her online Social Security account, she found no withholdings had been paid since June 2018. Other employees shared similar experiences, the report shows.
In an interview with CMS inspectors on May 14, the hospital's CEO said Rennova had not sent any payments to the hospital. An interview with the program director for the hospital's wound-care and hyperbaric center determined the program had not been paid since Rennova assumed ownership. That individual said repeated calls, letters and emails to Rennova's corporate offices were not returned.
A physician who had practiced at the hospital for many years told CMS inspectors May 14 he had stopped practicing or sending patients there because he felt the conditions were no longer safe.
Termination of the hospital's participation in the Medicare program will also result in termination of its Medicaid agreement, according to the letter.
The hospital can appeal the decision by requesting a hearing before an administrative law judge of the HHS' Departmental Appeals Board. Rennova CEO Seamus Lagan wrote in an email that he intends to appeal. He said Rennova just hired a new CEO for the hospital who is scheduled to start June 10.
A call to the hospital seeking comment was not returned.
