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

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The information,¬†under Noble Health letterhead, arrived at 5:05 p.m. on a Friday, with the topic line:¬†“Urgent Notice.”¬†Audrain Community Hospital, Paul Huemann’s office of 32 years, was once letting workers cross.

Word travels speedy in a small the town. Huemann’s spouse, Kym, first heard the unhealthy information within the automotive when a chum who’d gotten the letter, too, texted.

“Your termination was not foreseeable,”¬†said the letter, dated Sept. 8 and signed Platinum Health Systems, including that the firing was once everlasting “with no recourse” and that the “medical facility will be shuttered.”

“I don’t know what my next steps are,” mentioned 52-year-old Huemann, who supervised the laboratory on the Audrain hospital.

The long run for the Huemanns, loads of different workers and hundreds of sufferers in two small Missouri cities started to resolve lengthy sooner than that afternoon. The drama enjoying out in Paul Huemann’s native land is acquainted to many that are living in rural America: Communities are so determined to stay their hospital open that they are prepared to gamble on any purchaser, together with the ones subsidized by means of personal fairness.

Sometimes they lose.

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Paul Huemann, the previous laboratory manager at Audrain Community Hospital in Mexico, Missouri, was once lately let cross after the hospital’s dad or mum corporate unexpectedly introduced it was once shuttering the ability.¬†

Kym Huemann


Noble Health, a three-year-old personal equity-backed startup, had bought Audrain and within sight Callaway Community Hospital all over the pandemic. In March, it suspended all hospital services and products and later furloughed 181 workers, state records display.

Noble ‚ÄĒ dealing with staggering debt, greater than a dozen court cases, and no less than two federal investigations ‚ÄĒ struck a deal to promote the hospitals in April to Platinum Neighbors, which is affiliated with Texas-based¬†Platinum Team Management¬†and Platinum Health Systems. In overdue June,¬†Platinum asked¬†Missouri officers to increase till Sept. 21 a time limit to reopen the hospitals.¬†

On Tuesday, Platinum officers informed KHN that, “on behalf of Noble,” they requested Missouri regulators for an extra 30-day extension “in an attempt to explore all alternatives for reopening these facilities,” Ryann Gordon, Platinum’s director of advertising and marketing, mentioned. “The backpay and health benefits of the employees is of utmost importance.”

Hours sooner than the licensing time limit Wednesday,¬†Platinum submitted a request¬†for a 90-day variance. Missouri laws don’t permit every other extension inside a yr, mentioned Lisa Cox, a spokesperson for the Missouri Department of Health and Senior Services. So the state “worked with them” and granted the request, she mentioned.

Platinum mentioned the hospitals want time to finish building initiatives. Audrain’s “emergency room area” has damaged home windows, and Callaway’s hospital wishes “critical repair to the plumbing,” in line with the state approval letter. The hospitals can trade possession all over the 90 days, Cox mentioned.

Cory Countryman, president of Platinum Health Systems, showed the termination of the remainder hospital team of workers. “We are working with multiple partners to reopen the hospitals,” he mentioned.

That may contain a brand new proprietor. One prospect is Owen Shuler, a Georgia-based entrepreneur, who mentioned he is considering purchasing them. Shuler, who was once reached by means of telephone after he’d visited the agricultural communities, mentioned, “I love what I see.”

“It’s heartbreaking as to what has occurred,” mentioned Shuler, whose firms come with¬†Bankers Realty Corp.¬†and¬†Shuler Capital Corp. If he purchased the hospitals, he mentioned, he would accomplish that as managing director of his new mission, CareONE Global. “In terms of the due diligence, I do not like what I’m seeing and learning,” he mentioned. What he concluded from his overview is that “private equity and venture capital need to be kept the heck out of health care.”

On his RelatedIn profile, Shuler mentioned he “brings a lifelong perspective from a family owned skilled care business” in addition to experience in “telemedicine and healthcare services.”

Shuler, who showed the hospitals were saddled with really extensive debt ‚ÄĒ “in the ballpark” of $45 million to $50 million ‚ÄĒ mentioned, “I am not prepared to go on the record about business strategy quite yet.” He mentioned his method could be “holistic” and come with telehealth. Many business leaders have argued telehealth is a strategy to carry top quality medication to rural communities that may’t find the money for, and don’t want, a complete platoon of experts on-site.

“Our target is acquiring hospitals in rural and disadvantaged areas and introducing our capabilities to them,” Shuler mentioned, including that solving the 2 “basically broken” Missouri hospitals from the ground up could be “much easier than trying to go into a healthy system.”

Still, it is unclear whether or not Shuler or every other purchaser will come via and what it will take to reopen them after years of possession instability and monetary bother.

Venture capital and personal fairness company Nueterra Capital introduced Noble in December 2019 with executives who had by no means run a hospital, together with Donald R. Peterson, a co-founder who previous to becoming a member of Noble were accused of Medicare fraud. Peterson settled that case with out admitting wrongdoing and in August 2019 agreed to be excluded for five years from Medicare, Medicaid, and all different federal well being methods, in line with the Health and Human Services Office of Inspector General.

Federal regulators didn’t block the purchase wherein Peterson was once concerned. “All ownership and managing control information is self-reported,” mentioned Centers for Medicare & Medicaid Services spokesperson Kristen Clemens.

Skimping on care

It did not take lengthy for issues to floor below Noble Health’s stewardship. Noble has authorised just about $20 million in federal COVID-19 reduction finances, together with $4.8 million from paycheck coverage methods, in line with public information.

Yet¬†doctors, nurses, and patients¬†noticed proof that the brand new house owners were skimping on services and products ‚ÄĒ failing to pay for and inventory surgical provides and medicine. In Callaway, state inspectors made up our minds that¬†conditions in the hospital endangered patients. Former workers supplied KHN expenses and pay stubs they mentioned confirmed¬†Noble had also stopped paying¬†for worker well being, dental, imaginative and prescient, and lifestyles insurance coverage advantages.

After workers filed lawsuits about marvel clinical expenses, the Department of Labor’s Employee Benefits Security Administration introduced an investigation in early March, in line with a¬†letter sent to the company¬†and bought by means of KHN. The division showed a 2nd investigation by means of every other one of its divisions, Wage and Hour, into Noble’s control of its Audrain hospital and health facility.

In April, Noble struck a deal to promote each hospitals for $2 and a inventory switch to Platinum, which assumed all liabilities,¬†according to the agreement.¬†In a June 22 letter¬†to state regulators in regards to the hospitals’ working licenses, Platinum mentioned, “We are requesting this continuance as Noble Health stock has been transferred to Platinum Medical Management.”

While visiting the hospitals in April, Countryman informed workers it was once a “priority” to pay the again wages Noble owed them.

Neither Noble nor Platinum made excellent on that within the months since, workers contend. In addition to the federal investigations, 9 salary claims ‚ÄĒ the biggest for $355,000 ‚ÄĒ were filed towards Noble in Kansas, in line with¬†data provided¬†via a Kansas Open Records Act request.

By early August, others were spotting the worker lawsuits. Principal, which supplied dental and imaginative and prescient care protection,¬†sent letters¬†to workers announcing it will no longer call for that any employee pay off advantages the insurer coated after Noble stopped sending premiums for worker protection. “This situation is not typical,” wrote Principal spokesperson Ashley Miller in an e mail.

Huemann, as laboratory manager, was once a number of the workers who were not furloughed within the spring. They reported for paintings each day within the hopes that the Audrain hospital would reopen. Huemann checked reagents and saved machines operational at the same time as cash for provides was once tight.

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

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Audrain Community Hospital is noticed in Mexico, Missouri, in August.

Matt Kile for KHN


Huemann, who supplied pay stubs to KHN, mentioned he won a paycheck from Noble in overdue March. He mentioned he didn’t obtain every other paycheck till overdue May. He won common paychecks in June and early July. But his 2nd July take a look at, below Platinum, was once per week overdue. His ultimate paycheck arrived Aug. 8 and was once additionally overdue.

His final seven tests got here from 3 firms. They were all on Platinum’s watch: Initially Platinum Neighbors issued the tests, then Callaway County Community Hospital, and in any case Noble Health Audrain Inc.

“Everyone cashed their check as soon as they got it,” Huemann mentioned. “There are so many red flags. But you know, we’re at their mercy, we have no control, and we’re still thankful they are saving us.”

The take a look at stubs additionally display the hospital’s operators deducted $1,385 in general from Huemann’s pay for insurance coverage. The health insurance was once intended to be with Blue Cross and Blue Shield of Texas, however Huemann mentioned he by no means won a card and may no longer ascertain protection.

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

Countryman referred all monetary inquiries to Platinum’s company workplaces. Ryan Cole, leader government of Platinum Team, did indirectly reply to calls and emails searching for remark.

“Nerve-wracking”

Some medical doctors left the town because the upheaval swallowed the hospitals.

Others, similar to circle of relatives medication physician Diane Jacobi and her nurse practitioner, Regina Hill, joined MU Health Care, affiliated with the University of Missouri, in Mexico, Missouri, the 11,000-person the town the place Audrain Community Hospital is positioned.

Jacobi mentioned her sufferers need native care. “I don’t know if you’re a mama, but if you’re in labor, the idea that you have to spend 45 minutes in a car on the way to the hospital is nerve-wracking,” she mentioned. “It’s safer if you have care.”

Lou Leonatti, an lawyer who lives in Mexico, mentioned he feels so strongly that the neighborhood wishes a hospital and emergency care that he supplied loans final yr to Noble so the corporate may meet payroll. Leonatti’s non-public $60,000 mortgage, with an rate of interest of about 3%, was once due in January however, he mentioned, stays unpaid.

Leonatti helped get started Project Sunrise, an area financial construction workforce. If a brand new settlement isn’t reached, he mentioned, “we would like to have a Plan B available.”

Peterson,¬†who helped launch¬†Noble’s failed effort to show across the two Missouri hospitals, turns out to have discovered his Plan B in Dubai. “I’m sitting in the Emirates Air lounge in Dubai marveling at the experience being afforded me at the tender age of 68,”¬†he wrote on LinkedIn. “I’ll be in Riyadh for the next week finishing up due diligence on launching a new business there.”

The submit made Tonya Linthacum, a nurse practitioner who labored at Audrain’s most cancers screening middle for greater than 20 years, livid. She mentioned that he “destroyed a lot of people’s lives and livelihoods,” including that “to have someone dupe you like that” and “going on with no consequences. It’s just not the way the world is supposed to be.”

Peterson declined to remark.

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