Newspaper article St Louis Post-Dispatch (MO)

A Rural Missouri Hospital Has a Plan to Stay Alive, but the Federal Government Is Objecting

Newspaper article St Louis Post-Dispatch (MO)

A Rural Missouri Hospital Has a Plan to Stay Alive, but the Federal Government Is Objecting

Article excerpt

At least five rural Missouri hospitals have closed since 2010, and Iron County Medical Center is working hard to avoid becoming the sixth.

The hospital in Pilot Knob, Missouri, filed for bankruptcy last year, and only one creditor stands in the way of a successful reorganization: the U.S. Department of Agriculture, which lent money to Iron County through a program designed to enhance economic opportunity in rural areas.

The USDA, which is owed almost $7 million, contends that it should be paid ahead of other creditors, including providers of critical medical supplies. A federal bankruptcy judge has scheduled a hearing on the hospital's disclosure statement, to which the USDA has objected, Tuesday in Cape Girardeau.

The hospital's chief executive, Joshua Gilmore, finds the objection baffling. Bond documents say the hospital needs to pay the USDA out of net revenue, which is the amount it gets paid for providing care minus all operating costs.

The hospital hasn't had any net revenue in several years, Gilmore says. In other words, it's losing money, which is why it ended up in bankruptcy.

Medicare has cut hospital payments by 2 percent since 2013, which means Iron County Medical Center loses money on its elderly patients. Private insurers keep getting pickier about what they'll reimburse, but law and morality require the hospital to care for any sick patient who comes to its door with an emergency.

There's plenty of sickness in Iron County, about 85 miles south of St. Louis, where life expectancy at birth is five years below the state average. According to a state agency, Iron has the secondhighest medical need among Missouri's 114 counties.

The hospital sees about 6,000 emergency room patients a year, and a similar number of visits to clinics specializing in rheumatology, respiratory care and other services. …

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