Hospital update: Allegiance expected to leave Eureka Springs by Feb. 1

Friday, December 27, 2019

By Samantha Jones

The Eureka Springs Hospital Commission is saying goodbye to Allegiance Health Management.

On Tuesday, Dec. 17, chairman John House explained what has happened since the commission hired Alliance Management Group to help transition between management companies. House said he's spoken with the commission's attorney, who said Allegiance intends to leave Eureka Springs Hospital by Feb. 1.

"They're agreeing to everything by the end of January," House said. "Of course, there's some flux there."

House said the commission needs financial information from Allegiance to move forward, especially when it comes to Medicare. If the commission ends up filing a new cost report, House said, that might lead to a chargeback against the hospital.

"What would be the problem with doing that chargeback or looking back at the books?" asked commissioner Christopher Baranyk.

"The problem is Medicare might start doing a full audit," House said.

"What do we have to hide?" Baranyk asked.

"I don't know that we have anything to hide," House said. "If they come back and say, 'We paid you too much money,' then we pay that, not Allegiance. It's whoever owns the license."

With Allegiance planning to leave by the end of January, House said, the commission's attorney has contacted the Arkansas Department of Health. House said the department of health must receive 30 days notice before a hospital license is transferred.

"Let's just say the department of health is very encouraged that we are making this change," House said. "It will be the last hold-out for Allegiance in the state of Arkansas."

House then gave the floor to Alliance Management Group representatives Darrell Parke and Ryan Capshew. If the commission wants to operate the hospital before the transfer of ownership, Parke said, it would be best to receive power of attorney from the courts. Parke said the commission's attorney recommended making this move.

"It's how we can get in control to implement a recovery action plan," Capshew said. "That would be great if we could have power of attorney. They still technically have control of the hospital for the 30 days and we're able to implement programs that would get our program started sooner rather than later."

Commissioner Tyson Burden asked if it will be easy to transfer ownership from Allegiance to the commission and Capshew said it's going well so far.

"We'll see where negotiations go," Capshew said. "I'm jumping ahead, but we already know we're going to have to examine the previous five years of cost reports. We need a team of people who only do that for their profession."

One thing the hospital needs to do, Parke said, is charge more for its services. He said that would mean higher reimbursements.

"You have to drive those rates up," Parke said, "so anything we can do cost report-wise from the expense side is important to us. It's a matter of appropriate filing."

The commission is moving into recovery faster than he expected, Parke said, but there's still much to be done. The most important thing, Parke said, is encouraging employees to stick around during the transition period and beyond.

"It's very clear there's a lot of trauma. There's a lot of wounds that need to be healed," Parke said. "If you put the staffing issues aside, there's a lot of maintenance that needs to be done and hasn't been done. [Allegiance] hasn't been keeping things up to date."

Parke continued, "There's equipment that needs to be purchased and fixed. The staff needs to be stabilized. We're trying to figure out what the staff plan is going to be. That's first and foremost on the list is to go to employees and say, 'You're OK.' "

The second thing, Parke said, has to do with dollars and cents. Parke said Alliance plans to develop a relationship with legislators to make it easier to transfer the Medicare certification from Allegiance to the commission. In the past, Parke said, Alliance has successfully used this strategy at another facility.

"When we get that 855 form, instead of just mailing it to Medicare, we can use our field representatives from the Congress offices to walk it in," Parke said.

Developing a relationship with legislative representatives will benefit the hospital in the long run, Capshew said. Capshew said he's encouraged by Alliance's progress so far.

"I have a pretty good understanding of what the operational costs are for the hospital," Capshew said. "Clinically, things are moving really well. The doctors are doing rounds on patients."

"We've talked with the ER doctors and they're happy to see some changes," Parke added.

The doctors feel comfortable admitting patients again, Capshew said.

"They feel confident if they admit a patient, the supplies will be available," Capshew said. "A lot of those concerns have been alleviated over the past couple of weeks."

Baranyk said he hopes to see some physical changes at the hospital.

"If we just improve a lab in the building and maybe put some new floors in that's going to make a big difference to show we're doing something," Baranyk said.

Also at the meeting, commissioner Barbara Dicks gave an update on the renovation at 25 Norris St. Dicks said the commission has spent $22,000 of the $40,000 allocated for the project, which includes $15,000 for a new furnace. The first three phases of the renovation are complete, Dicks said, and the upstairs should be completed by the end of the year.

"We're working on phase four and cleaning upstairs," Dicks said. "We still have a cleanup crew and a carpenter coming this week."

The commission's next regular meeting is scheduled for 6 p.m. Monday, Jan. 20, at 25 Norris St.

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