Recently the Eureka Springs City Council voted unanimously to encourage the Eureka Springs Hospital Commission to investigate a proposal by Allegiance Health Management (AHM) that the city borrow $5 to $8 million to tear down and rebuild part of the ESH.
AHM signed a lease to manage the ESH in 2007 promising to build a new hospital. Later they said that wasn’t financially feasible. Now they essentially want the ESH to build a new hospital with taxpayers bearing the costs.
City and hospital leaders need to consider the company’s troubled history. Currently AHM is facing trial in federal court for alleged false Medicare billing in a case in which hospitals associated with AHM have paid $15.69 million to resolve False Claims Act allegations involving medically unnecessary psychotherapy services provided through AHM.
AHM also owns the North Metro Medical Center in Jacksonville, which has had a number of problems including being sued six times by vendors since May 2014 for failing to pay bills.
An editorial published Oct. 16, 2015 in the Arkansas Leader, said, “Rock Bordelon, chief executive officer of Allegiance Health Management, claims he and his company are the saviors of North Metro Medical Center in Jacksonville. But it looks more like a bull turned loose in a fine china shop to deal with a mouse problem.
“By all accounts, Bordelon is a nice guy to hang out with, have a drink with, even go hunting with, but not one to have running a hospital. Bordelon is said to be in Canada this weekend filming for his hunting show. Maybe he’s also studying that country’s single-payer health insurance program, which might make it easier for North Metro to survive and cover its employees, who have been without health insurance off-and-on for months.
“…This group has a bad habit of taking money out of paychecks and not sending it where it needs to go, such as to insurance and taxes.”
In another editorial October 14, 2016, the paper said that financial and administrative problems continue to hamstring North Metro Medical Center.
“Tax bills have piled up and Medicare reimbursements have been slashed due to high infection rates,” the editorial stated. “Since the city sold the former municipal hospital to AHM of Shreveport, La., the hospital’s problems seem to have only gotten worse. They’ve invested little in the facility, scared away most medical professionals from joining its team and had a stream of criticism from its top administrators and employees.”
The editorial said there are concerns about the hospital’s viability, patient-care quality and financial stability. “It’s worrying that Allegiance could bail out on the community if its financial problems become too big. It won’t be able to stagger on forever.”
Contacted for comment, Jonathan Feldman, editor of The Arkansas Leader, said problems have continued.
“Tricare, the military’s insurance provider, has stopped letting its customers go to North Metro because of payments problems,” Feldman said. “That’s a big problem since Jacksonville is home to the Little Rock Air Force Base. State Rep. Joe Farrer [R-Austin] led the hospital briefly. He resigned when Allegiance owners overruled his firing of a doctor Farrer believed to be drunk on the job.”
Feldman said it was a troubled hospital before the takeover, but things quickly got worse after it was purchased by Allegiance.
“For months, they told us to stop saying Allegiance owns North Metro,” Feldman said. “That’s right. They denied owning the hospital suddenly. That wasn’t true, of course.”
Feldman said Bordelon sent the newspaper a text message threatening to not advertise if they didn’t get better news coverage. But Feldman said that was an empty threat because AHM hadn’t advertised for years after being a year late paying an advertising bill.
AHM has also faced lawsuits in Louisiana. In March 2010, the Louisiana Third Circuit Court of Appeals upheld a lower court ruling awarding $575,696.68 to the Louisiana Health Care Group from Allegiance Health Management regarding a breach of contract concerning Allegiance’s purchase of Bienville Medical Center.
Sound like someone you would trust to guide a $5-$8 million hospital renovation?
Becky Gillette