Hospital Board Chair Provides Update

In response to some information from Progressive Health Group published in the Jan. 19 Record about their attempt to acquire the closed La Grange hospital, St. Mark’s Medical Center Board Chair Dudley Piland provides this response: “St.Mark’sisgladthatPHG (Progressive Health Group) is still interested in acquiring the hospital. After all, we have the same goal to return some level of hospital services to our community. With that being said, several of the statements made by PHG’s Mark Hallman in the January 19 edition of the Fayette County Record need to be put into context.

“Throwing the St. Mark’s Board under the bus for taking the actions required by the State and Federal regulators seems disingenuous and selfserving at best. St. Mark’s had notified State and Federal regulators of the hospital closure and forfeiture of licenses and CMS (Centers for Medicare and Medicaid Services) number as required by applicable laws and regulations. Those notifications happened before PHG ever expressed interest in St. Mark’s. PHG has had over 90 days since St. Mark’s closure to ascertain what it takes to get licenses and a CMS number to reopen the hospital.

“On January 8, Quentin Whitwell, PHG’s CEO, told Lument that PHG no longer intended to file the Transfer of Physical Assets (TPA), which was a requirement of HUD for PHG to become the single member of St. Mark’s. Given the passage of time and the resulting effects of that announcement, Lument has shared that it is highly unlikely that the TPA is a viable alternative at this point in time.

“PHG’s decision not to file the TPAhad a domino effect on several other key issues. The first impact is that it triggered Lument to file a mortgage insurance claim with HUD. As a result, HUD will soon hold St. Mark’s mortgage note. HUD is currently reviewing its options and the process to sell the note.

“The second significant impact is that St. Mark’s former CMS number and State license very likely will not be reinstated. Instead, to reopen the hospital will require a new CMS number and State license. An integral part of both reinstating the old licenses or getting a new license, which precedes issuance of the CMS number, is that the facility must meet the current life safety codes according to the State’s Architectural Review Unit (ARU). The cost and timeline to bring the building into compliance should be a focus of any organization that wants to reopen the hospital. Although the ARU is available to assist in that endeavor, to date, St. Mark’s is not aware of any such assessment being conducted.

“The third significant impact was that the Right of First Refusal Agreement (RoFR) between St. Mark’s and PHG automatically ended. In accordance with the terms of that agreement, the RoFR terminated once HUD notified St. Mark’s that it intends to sell the note.

“St. Mark’s has done everything PHG has requested to facilitate their pursuit and will continue to do so within the constraints of HUD’s processes to sell the mortgage note. HUD is doing their due diligence and preparing for the note sale. As the process becomes more defined, we will share those developments.”