JAMESTOWN — Rennova Health has announced that it will lay off part of its staff at Jamestown Regional Medical Center, but pledges that it will remain open and committed to the community.

Approximately 20 employees will be laid off by the hospital, according to a prepared release by Rennova spokesperson Rebecca Lagan. That is approximately 14 percent of the hospital’s current staff of 140 employees.

“Our current plans will affect approximately 20 people which while not insignificant means that we will continue to directly employ approximately 120 people from the local area,” the hospital said in the statement.

The hospital said the layoff was necessary because the hospital has “more staff on hand than was perhaps necessary to facilitate the necessary levels of care we have been providing.”

In the statement, Rennova acknowledged a “significant decline” in receipt of payments in recent months, which it said was due to the transition of a new billing company in December 2018. It said that issue has caused other problems — including a recent decision by the Centers for Medicare & Medicaid Services (CMS) to terminate Jamestown Regional’s involvement in the Medicare program. After June 12, the hospital will not receive reimbursement for services provided to Medicare or Medicaid patients.

However, the hospital said that every effort will be made to get back on the Medicare program, “but in the meantime, we have evaluated our cost structure in keeping with the current level of business. Unfortunately, our evaluation has determined that we need to make an adjustment in staffing levels at this time to protect the long-term sustainability of the hospital.

“This decision has not been without the utmost consideration for all parties involved, not the least of which is our staff and their families,” Rennova added.

A May 14 CMS survey at Jamestown Regional found that the hospital owed more than $4 million to vendors, which had resulted in a loss of services in some areas. The hospital was reportedly set to close on May 16, before an 11th hour change kept it open. The reason for the near-closure was reported to be an ultimatum from CMS that the hospital close or be forced to close. A CMS spokesperson told the Independent Herald days later that the agency does not force hospitals to close.

While the hospital did not close, it was placed on diversion a week later, with area EMS agencies being told not to deliver patients to Jamestown Regional due to a lack of supplies in the ER. Less than a week after that, CMS — which had told the IH in a statement that it was working with Rennova to correct deficiencies and ensure that the hospital’s Medicare agreement was not terminated — announced that it was moving forward with that termination.

While a loss of reimbursement for Medicare and Medicaid patients is often a hospital’s death knell, hospitals can correct deficiencies and reapply for participation in the Medicare program.

In Friday’s statement, Rennova reaffirmed its commitment to the community.

“We recognize that JRMC is an integral part of the community; we look forward to filling the health care needs of our customers and the long-term success of the hospital to serve the needs of the community,” the statement read. “Our recent acquisition of an additional hospital in Jellico along with Big South Fork Medical Center offers an exciting opportunity for JRMC and these hospitals to work together to offer additional services to the community and with BSFMC is testament to the investment we have made and will continue to make in this geographic location.”

While many of the problems that have been manifest at Jamestown Regional have not been apparent at Big South Fork Medical Center, there have been reports of supply shortages and services being terminated by unpaid vendors. On May 31, BSFMC’s payroll was delayed, with the hospital initially saying that an issue with a wire transfer was prompting the delay. On June 4, the hospital announced that it was awaiting receipt of a bridge loan to make payroll. Employees received their paychecks on May 5, along with an offer from BSFMC to pay bank overdraft fees that employees had incurred as a result of the delayed payroll.

BSFMC has not been placed on diversion like its sister hospital in Jamestown, and there has been no indication that the hospital is at risk of losing its Medicare license.

Rennova’s complete statement follows:

“Jamestown Regional Medical Center (JRMC), A Rennova Health Company, strives to be a responsible partner in the local community and to those we serve for their health care needs. Unfortunately, it has become necessary for the hospital to readjust its staffing levels in accordance with our current census. We recognize that any reduction in staff causes concern and raises questions and with so much information, including some that are totally inaccurate circulating in the public domain we wanted to ensure that you have information at hand from the company.

“We have always taken a cautious approach to staffing levels and ensured that we had more staff on hand that was perhaps necessary to facilitate the necessary levels of care we have been providing. It is also true that the hospital has sustained a significant decline in receipt of payments over recent months, caused in part by mistakes made at the facility during a transition to a new billing company in December 2018. While these mistakes have now been corrected and we expect to receive what we are owed from payers, the past few months of an unexpected cash flow deficit have caused other problems that now require correction as well. As has been well publicized CMS has decided to terminate the hospital from participation in the Medicare program effective June 12th. Every effort will be made to correct this matter in the immediate future but in the meantime, we have evaluated our cost structure in keeping with the current level of business. Unfortunately, our evaluation has determined that we need to make an adjustment in staffing levels at this time to protect the long-term sustainability of the hospital. This decision has not been without the utmost consideration for all parties involved, not the least of which is our staff and their families.

“For information, we have to date directly employed approximately 140 people in JRMC and have a number of other contracted employees and professionals on site. Our current plans will affect approximately 20 people which while not insignificant means we will continue to directly employ approximately 120 people from the local area. We hope that corrective action on the above- mentioned matters will avoid any further loss of employment and will instead see employment levels increase to and surpass previous levels in the not too distant future.

“We recognize that JRMC is an integral part of the community; we look forward to filling the healthcare needs of our customer’s and the long-term success of the hospital to serve the needs of the community. Our recent acquisition of an additional hospital in Jellico along with Big South Fork Medical Center, offers an exciting opportunity for JRMC and these hospitals to work together to offer additional services to the community and with BSFMC is testament to the investment we have made and will continue to make in this geographic location.

“We are happy to repeat that Rennova Health and Jamestown Regional Medical Center are committed to the citizens of the communities we serve for the long term and we look forward to sharing more positive actions with you in the future as we correct the current situation with CMS , invest in and provide additional services from the hospital. This starts with the appointment of a new, experienced CEO starting at the facility on Monday June 10th. We expect to provide a press release with more details on this appointment on Monday and will provide continued updates where relevant on the CMS matter as we make progress there.”