Buy and Break: After Platinum Health took control of Noble Sites, all hospital workers were fired

The news arrived at 5:05 p.m. Friday under a Noble Health letterhead with the subject line: “Urgent Notice.” Audrey Community Hospital, Paul Human’s workplace of 32 years, was laying off workers.

Word travels fast in a small town. Human’s wife, Kim, first heard the bad news in the car when a friend who received the letter also texted.

The letter, dated Sept. 8, said “your termination was not anticipated” and was signed by Platinum Health Systems, adding that the firing was permanent “without recourse” and that the “medical facility will be closed.” “

“I don’t know what my next steps are,” said Human, 52, a laboratory supervisor at Audrey Hospital.

One photo shows Paul Human standing in front of the closed doors of Audrey Community Hospital.
Paul Human, a former laboratory supervisor at Audrein Community Hospital in Mexico, Missouri, was recently let go after the hospital’s parent company suddenly announced it was closing the facility.(Chem Human)

The future of Humans, hundreds of other workers and thousands of patients in two small Missouri towns had begun to unravel long before that afternoon. The drama in Paul Human’s hometown is familiar to many in rural America: communities so desperate to keep their hospitals open that they’re willing to gamble on any buyer, including private equity. Supported persons.

Sometimes they lose.

Noble Health, a three-year-old private equity-backed startup, acquired Audrey and nearby Callaway Community Hospital during the pandemic. In March, it suspended all hospital services and later laid off 181 employees, state records show..

Noble — facing staggering debts, more than a dozen lawsuits and at least two federal investigations — reached an agreement in April to sell the hospitals to Platinum Neighbors, an affiliate of Texas-based Platinum Team Management and Platinum Health Systems. Is. In late June, Platinum asked Missouri officials to extend the deadline for reopening hospitals to Sept. 21. On Tuesday, Platinum officials told KHN that, “on behalf of Noble,” they asked Missouri regulators for an additional 30-day extension “in an effort to explore all alternatives to reopening these facilities.” said Ryan Gordon, Platinum’s director of marketing. . “Employee back pay and health benefits are of utmost importance.”

Hours before the licensing deadline on Wednesday, Platinum submitted a request for a 90-day variance. Lisa Cox, spokeswoman for the Missouri Department of Health and Senior Services, said Missouri regulations do not allow another extension within a year. So the state “worked with them” and approved the application, he said.

Platinum said hospitals need time to complete construction projects. Audrey’s “emergency room area” has broken windows, and Callaway’s hospital needs “significant plumbing repairs,” according to the state approval letter. Hospitals can change ownership within 90 days, Cox said.

Corey Countryman, president of Platinum Health Systems, confirmed the rest of the hospital’s layoffs. “We are working with several partners to reopen the hospitals,” he said.

It may include a new owner. One possibility is Owen Shuler, a Georgia-based entrepreneur who said he’s thinking about buying them. “I like what I see,” said Schuler, reached by phone after visiting rural communities.

“It’s heartbreaking what’s happened,” said Shuler, whose companies include Bankers Realty Corp. and Shuler Capital Corp. If he bought hospitals, he said, he would do so as managing director of his new venture, CareONE Global. “In terms of the future, I don’t like what I’m seeing and learning,” he said. What he concluded from his review is that “private equity and venture capital need to be kept out of health care.”

On his LinkedIn profile, Schuler said he “brings a lifelong perspective from a family-owned skilled care business” as well as expertise in “telemedicine and healthcare services.”

Schuller, who confirmed that the hospitals have substantial debt — “in the ballpark” of $45 million to $50 million — said, “I’m not ready to go on the record about the business strategy yet. ” He said his approach would be “holistic” and include telehealth. Many industry leaders have argued that telehealth is a way to bring high-quality medicine to rural communities that cannot afford or need a full platoon of on-site specialists.

“Our goal is to acquire and bring our talent to hospitals in rural and underserved areas,” Shuler said, adding that fixing Missouri’s two “fundamentally broken” hospitals from the ground up “will be a healthy It would be much easier than trying to get into the system.”

Still, it’s unclear whether Shuler or another buyer will come through and what it will take to reopen after years of ownership instability and financial woes.

Venture capital and private equity firm Nueterra Capital launched Noble in December 2019 with executives who had never run a hospital, including Donald R. Patterson, a co-founder who had been accused of Medicare fraud before joining Noble. . Patterson settled the case without admitting wrongdoing and agreed in August 2019 to be disqualified from Medicare, Medicaid and all other federal health programs for five years, according to the Health and Human Services Office of the Inspector General.

Federal regulators did not block the acquisition that involved Patterson. “All ownership and management control information is self-reported,” said Kristen Clemens, spokeswoman for the Centers for Medicare and Medicaid Services.

It didn’t take long for problems to surface under the auspices of Noble Health. According to public records, Noble has accepted about $20 million in federal Covid-19 relief funds, including $4.8 million from paycheck protection programs.

Yet doctors, nurses, and patients saw evidence that the new owners were neglecting services—failing to pay for and stock surgical supplies and drugs. In Callaway, state inspectors determined that hospital conditions were putting patients at risk. Former workers provided KHN with bills and pay stubs that said Noble also stopped paying employees’ health, dental, vision, and life insurance benefits.

The Labor Department’s Employee Benefits Security Administration opened an investigation in early March after employees filed complaints about staggering medical bills, according to a letter sent to the company and obtained by KHN. The department confirmed a second investigation by another of its divisions, Wage & Hour, into Noble’s management of its Audrey hospital and clinic.

In April, Noble agreed to sell the two hospitals for $2 and transfer the stock to Platinum, which assumed all liabilities under the deal. In a June 22 letter to state regulators about the hospitals’ operating licenses, Platinum said, “We are requesting a continuance as Noble Health stock is transferred to Platinum Medical Management.”

While visiting hospitals in April, Countryman told employees that paying Nobel back wages owed was a “priority.”

Employees claim that neither Noble nor Platinum did anything good to him in the months that followed. In addition to the federal investigation, nine wage claims — the largest for $355,000 — have been filed against Noble in Kansas, according to data provided through a Kansas Open Records Act request.

By early August, others were acknowledging employee complaints. Principal, which provided dental and vision care coverage, sent letters to workers stating that no worker would demand insurance after Noble stopped paying premiums for employee coverage. Return the benefits received by the doer. “This situation is not common,” principal spokeswoman Ashley Miller wrote in an email.

Human, as a laboratory supervisor, was among the workers who were not laid off in the spring. He reported to work each day hoping that Audrey Hospital would reopen. Humans tested reagents and kept machines working even as money was tight for supplies.

“We couldn’t get anything,” Human said, “so we were living with what we had.”

Human, who provided the pay stubs to KHN, said he received a paycheck from Noble in late March. She said she didn’t get another paycheck until late May. He received regular salaries in June and early July. But his second July check, under Platinum, was a week late. His last salary arrived on August 8 and that too was late.

His last seven checks came from three companies. They were all on Platinum’s watch: initially Platinum Neighbors issued the checks, then Callaway County Community Hospital, and finally Noble Health Audrey Inc.

“Everybody cashed their check as soon as they got it,” Human said. “There are a lot of red flags. But you know, we’re at their mercy, we have no control, and we’re still grateful that they’re saving us.”

Check stubs also show hospital operators deducted a total of $1,385 from Huemann’s pay for insurance. The medical insurance was supposed to be through Blue Cross and Blue Shield of Texas, but Human said he never received the card and couldn’t verify coverage.

“I called four or five times on different days,” he said. “They could never find me no matter how they looked at me, Social Security or date of birth, or anything.”

Countryman referred all financial questions to Platinum’s corporate offices. Platinum Team Chief Executive Ryan Cole did not immediately respond to calls and emails seeking comment.

Some doctors left the city as the upheaval swallowed up hospitals.

Others, such as family medicine Dr. Diane Jacoby and her nurse practitioner, Regina Hill, joined MU Health Care, which is affiliated with the University of Missouri, in Mexico, Missouri, a town of 11,000 where Audrey Community Hospital is located. Is.

Jacoby said his patients want local care. “I don’t know if you’re a mama or not, but if you’re in pain, the thought of spending 45 minutes in a car driving to the hospital is terrifying.” “It’s safer if you take care.”

Lou Levante, an attorney who lives in Mexico, said he felt so strongly that the community needed hospitals and emergency care that he extended a loan to Noble last year so the company could cover payroll. Levanti’s personal $60,000 loan, with an interest rate of about 3%, was due in January but, he said, has not yet been paid.

Levanti helped start Project Sunrise, a local economic development group. If no new contract is reached, he said, “we want to have a plan B available.”

Patterson, who helped launch Noble’s failed effort to convert two Missouri hospitals, appears to have found his Plan B in Dubai. “I am amazed at the experience I was given at the young age of 68, sitting in the Emirates Air Lounge in Dubai,” he wrote on LinkedIn. “I will be in Riyadh next week and will work diligently to start a new business there.”

The post infuriated Tonya Linthacum, a nurse practitioner who has worked at Audrey’s cancer screening center for more than two decades. He said it had “destroyed many people’s lives and livelihoods,” adding that “someone should cheat you like that” and “carry on with no consequences. It’s not the way it should be.” The way the world is perceived.”

Peterson declined to comment.

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