The Eureka Springs Hospital Commission met Monday night at the ECHO clinic with the primary topic consideration of the lease agreement between the Hospital Commission and Allegiance Health Management of Shreveport, La., which may be ending before its expiration date of 2022. Treasurer Barbara Dicks stated that the July lease payment was not received until August, which is not unusual for Allegiance.
Last month, commissioners issued a formal 30-day notice to Allegiance requesting remedy of failure to maintain the hospital building after two independent inspections reported that the building was not being maintained as agreed upon. “There has been zero reply,” Chair Dr. John House said.
So far Allegiance has failed to reply, but has until the end of the day on August 21 to do so. “They have chosen, apparently, to ignore us,” House said. Commissioners are not optimistic for a response and preëmptively voted to terminate their relationship with Allegiance.
The commission unanimously agreed to send out a second letter at 5:05 p.m. Wednesday in the event no response is received, providing Allegiance with a 10-day notice of termination to the lease agreement. Under advisement of the commission’s attorneys Megan Hargraves and John Baker of Mitchell Williams Law Firm in Little Rock, this second letter will assume disagreement if no response is provided, and will prepare commissioners to make a declaratory judgment either in federal or state court. Commissioners voted unanimously to pursue the judgment.
Commissioner Dr. Tyson Burden reviewed the current liabilities of Allegiance as it is associated with the Eureka Springs Hospital, and said Allegiance has accounts payable in the amount of approximately $5.5 million and notes payable for approximately $2.5 million.
While not confirmed, it is suspected that vendors providing products and services to Allegiance are not being paid. This cost/expense report brought up the question of who would be responsible for these debts in the event the commission must take over hospital management. Hargraves discussed that the lease agreement provided “no-transfer of networking capital,” verbiage which generally means the commission would not take on the debt of Allegiance.
It was discussed that while litigation can be expensive and time consuming, the commission is taking all the advised steps to make this transition as swift as possible. The website for Allegiance, ahmgt.com, is no longer available.
Commissioners are preparing for the possibility of special meetings as needed, and the next regular meeting is Monday, Sept. 16 at 6 p.m.