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CMS confirms open case involving Jamestown Regional; says it doesn’t force hospitals to close

JAMESTOWN — Jamestown Regional Medical Center remains open this week, ostensibly on a “day-to-day” basis, as unanswered questions remain about why the hospital was reportedly so close to closing last week.

The hospital was apparently only hours away from shutting down on Thursday. State Rep. John Mark Windle, D-Livingston, told the Cookeville Herald-Citizen newspaper Thursday afternoon that the federal Centers for Medicare & Medicaid Services (CMS) had given the hospital until nightfall on Thursday to close, or be forced to close. The Internal Revenue Service had placed a tax lien on the hospital for unpaid federal taxes, he said. Later in the afternoon, Fentress County Executive Jimmy Johnson — citing a discussion with Rennova executives — said CMS had been prepared to force the hospital to close over unpaid taxes, but Rennova had paid the taxes owed and forwarded a check to CMS, and the agency was allowing the hospital to stay open on a “day-to-day” basis.

CMS does indeed have an open case involving Jamestown Regional, the agency confirmed Monday, but it’s not for unpaid taxes — nor was the agency prepared to force the hospital to close.

“As of May 16, we have not issued a final termination notice to the Medical Center,” CMS said in a statement to the Independent Herald on Monday. “CMS and the Tennessee State Survey Agency are working together to ensure the safety of all patients in this facility. We continue to work with the hospital’s leadership to address its noncompliance with Medicare Certificate of Participation.”

That case stems from a February 5 survey at the hospital by inspectors from the Tennessee Department of Health, which found that Jamestown Regional owed 165 vendors a total of $2.9 million. A follow-up survey was conducted in April. At the time, CMS issued a 90-day notice of termination that was set for May 16 — Thursday’s date.

However, CMS protocol requires public notice to be given before a hospital’s Medicare license is actually terminated. And a CMS spokesperson confirmed to the IH that CMS — which is a licensing agency — does not have the authority to close hospitals.

“Please be mindful that CMS does not shutter the doors of hospitals,” said CMS public affairs officer April Worthington. “That’s solely a business decision made by the medical center. We may terminate a provider’s agreement (Medicare billing privileges). It’s important to note that most hospitals take the necessary steps to correct deficiencies prior to termination.”

Nor are unpaid federal taxes mentioned anywhere in the survey report filed by CMS. That leaves confusion about why the hospital was apparently preparing to close on Thursday — and how the narrative became that CMS was set to force the hospital to close over unpaid taxes.

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The IRS’s tax lien against Jamestown Regional was filed February 6. It lists $474,294.81 in unpaid taxes, including $55,466.66 from the second quarter of 2018 and $418,828.15 for the third quarter in 2018.

That tax lien was placed one day after a survey team visited the hospital in response to a complaint that payroll checks were being returned unpaid, bills were not being paid and there was potential for the electricity to be turned off.

The follow-up investigation on April 11 was due to a separate complaint from a staff member alleging that vendor services were being discontinued for non-payment. The survey team cited the hospital for deficiencies related to its Quality Assurance Performance Improvement and Food & Diabetic Services programs.

On January 14, the hospital’s environmental services vendor issued a notice that it would withdraw from its contract with the hospital for more than $92,000 in past-due fees.

On January 18, the hospital’s anesthesia provider discontinued services.

On January 24, the hospital’s emergency room physicians group issued a notice that it would stop providing services on February 1 due to more than $257,000 in unpaid balances.

On January 25, the hospital’s dietary and food services vendor discontinued services due to accounts not being paid.

Also in late January, the hospital’s MRI provider notified the facility that it would terminate services as of January 31 if it wasn’t paid.

In response, the hospital was able to hire the environmental services vendor’s employees that were at the hospital. It signed a new agreement with a separate anesthesia provider. A payment plan was negotiated with the ER physicians group, as well as on-call physicians, so that service was not disrupted. A similar payment plan was negotiated with the MRI provider to ensure that services were not disrupted. Finally, the hospital hired the food service vendor’s employees, while contracting with a dietician, to keep that program going.

CMS said that the hospital was able to negotiate payment plans with many of its vendors to ensure that services continued without disruption. However, the follow-up survey on April 11 determined that several services were still on hold due to delinquency in payment.

While Rennova corporate executives have been mum on the situation that is developing at Jamestown Regional, sources within the hospital’s sister facility in Oneida, Rennova-owned Big South Fork Medical Center, have been adamant that the local hospital is on solid footing and whatever might happen at Jamestown Regional will not have an impact on operations at BSFMC.

The IRS has also placed a tax lien against the Oneida hospital, the IH has learned. The lien, filed May 6, is for $1,464.49 in unpaid taxes for the fourth quarter of 2017. The State of Tennessee had also filed a tax lien against the hospital, but that lien has since been removed because the taxes were paid.

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Independent Herald
Contact the Independent Herald at newsroom@ihoneida.com. Follow us on Twitter, @indherald.
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