Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
May 23, 2019 03:48 PM

Tennessee hospital bought by lab company struggling to say afloat

Tara Bannow
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The rural Tennessee hospital purchased by a struggling Florida lab company last year is veering dangerously toward closure.

    West Palm Beach, Fla.-based Rennova Health bought Jamestown (Tenn.) Regional Medical Center from Community Health Systems in June 2018. It was a perplexing deal given Rennova had reported a $51 million net loss from continuing operations in 2017 and was being sued by landlords, contractors and employees over unpaid bills and wages.

    It appears those problems have followed Rennova to Jamestown, where vendors say the hospital owes it millions of dollars, employees have complained about not getting paid and federal regulators had threatened to cut off Medicare funding. Rumors swirl constantly in Jamestown over whether the hospital will continue to stay open. A call to the hospital on Thursday was not returned.

    "I don't know if they're going to be open tomorrow or the next day," said Jimmy Johnson, county executive for Fentress County, where the hospital is located. "It's just on a day-to-day basis."

    The CMS learned of problems at the hospital in February after the state investigated staff complaints about not getting paid and a concern about the electricity being turned off, a spokeswoman wrote in an email. The agency directed the hospital to fix deficiencies within 90 days or its Medicare billing privileges would be revoked.

    A Feb. 5 CMS inspection report of the Jamestown hospital provided to Modern Healthcare found it owed nearly $3 million to 165 vendors, 11 of whom had stopped providing services. The facility also lacked an annual budget and governing board.

    Hospital administrators told inspectors on Jan. 30 the hospital had switched to a new computer system that had delayed payments to the facility from insurers and others. They said they expected payments to resume, but were applying for loans in the interim.

    The following day, hospital leaders told inspectors they had worked out arrangements to continue services with several vendors, including for emergency department physicians, on-call physicians, environmental services and imaging. The hospital's food services vendor had already discontinued services, so the hospital hired staff and contracted with a dietitian. Leaders also said the hospital had found a new anesthesia provider after the former firm discontinued services.

    As of May 16, the CMS had not cut off the hospital's Medicare funding, but the agency continues to monitor its status toward compliance, the spokeswoman said.

    But ambulances are still taking patients elsewhere. Micah Dunford, director of Fentress County's ambulance services, said leaders at Jamestown Regional Medical Center told him to divert patients to other hospitals. Ambulances are taking patients roughly 40 minutes to an hour away to hospitals in Cookeville, Crossville and Livingston. Dunford said the hospital told him the directive had come from a state agency, but he did not speak to a state official directly.

    Dunford said he's not worried about safety issues as a result of the diversions.

    "I have some of the best trained guys in the state that work here," he said.

    Rennova CEO Seamus Lagan wrote in an email that the hospital's financial trouble started in December when it transitioned from CHS' billing services provider to another company. Managers, some of whom are no longer with the company, mistakenly uploaded a redundant chargemaster that resulted in billing errors and delays, he said. The hospital currently has an interim CEO in place and Rennova hopes to appoint a new CEO by the end of May, Lagan said.

    "This current short-term turmoil in no way changes the objective and strategy that Rennova has adopted to own and operate this or other TN hospitals for the longer term," Lagan wrote.

    Rennova owns two other hospitals in Tennessee, Jellico Community Hospital in Jellico, which it bought in March, and Big South Fork Medical Center in Oneida, which it bought out of bankruptcy in 2017.

    Rennova has not released its financial results for the full year 2018, but the company reported about $97 million in net income from continuing operations in the third quarter compared with a $9.8 million net loss from continuing operations in the third quarter of 2017. The net income came from a $109 million noncash gain on derivatives in the quarter, a category that didn't exist in the prior-year period. In an email, Lagan explained the derivative category "varies wildly based on the difference in share price and the conversion price of debt" as well as warrants the company could exercise.

    Rick Kes, a senior healthcare analyst with RSM, said some companies can issue loans that have embedded derivatives, so a decrease in value of the company's stock would reduce its liability and spike its derivative value.

    That may have been what happened to Rennova, whose stock is currently priced at virtually zero.

    Rennova said it drew $5 million in revenue in the third quarter of 2018, compared with about $800,000 in the prior-year period.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    diversity
    Health equity execs leveraging academic roles to drive long-term change
    Patrick Blair InnovAge
    PACE could expand amid possible nursing home closures: InnovAge CEO
    Most Popular
    1
    Centene to lay off 2,000 workers
    2
    How health systems are battling price-gouging allegations
    3
    Senate advances bill to temporarily aid hospitals, health centers
    4
    Elevance, Blue Cross Louisiana halt $2.5B proposed deal
    5
    Tower Health to sell urgent care centers, close others
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing