The Tulare Local Healthcare District’s board voted Wednesday night to temporarily suspend operations at Tulare Regional Medical Center, but the suspension won’t be immediate.
Members of the Tulare Local Healthcare District’s Board of Directors, and attorneys representing the district, stated before a closed session vote that the hospital could be forced to voluntarily shut down after the hospital’s current management company has threatened to unilaterally shut the hospital’s doors.
Those threats come after a bankruptcy court ruled Wednesday morning that the hospital could reject its contract with Healthcare Conglomerate Associates (HCCA) as soon as it found another alternative, or on November 27 — whichever comes first.
“HCCA indicated that they would likely be closing down the hospital. They stated that on October 29, they’re going to be issuing a WARN notice, suspending all employees,” Niki Cunningham, an attorney for the healthcare district, told the public..
If the company pulled out of the hospital, the state could shut down the hospital on an involuntary basis. Cunningham stated that the risk of that happening isn’t small.
“There is a concern that HCCA will walk off the premises after today’s ruling,” she continued, “because they know that the end is near. So there’s a lack of incentive on HCCA’s part, to stay in place.”
By voluntarily suspending operations, the hospital wouldn’t be subject to requirements as stringent as an involuntary shutdown. It could also reopen more quickly.
The alternative — a state-mandated shutdown — wouldn’t be tenable, Cunningham said.
If the state were to shut down the hospital, it would face stiff fines and need to re-open “at code,” necessitating improvements to the hospital’s buildings and structures.
“Even if the state approved [Community] today, we don’t have access to all the financial records, we don’t have simple things like passwords to the computer systems,” Cunningham said. “There are some real practical considerations that are going into this discussion.”
The closure might not affect the district’s other properties, such as its clinics and the Evolutions gym, but neither board members nor attorneys could give an exact idea of what would close and what would stay open.
An Accelerated Pace Is Still Slow
Richard Gianello, of Wipfli/HFS Consultants, said that his hope was that the hospital would be closed “thirty to sixty” days – but that didn’t sit well with the board.
Wipfli/HFS was hired by the board to assist in the transition from HCCA to a new operator. Currently, Community Medical Centers of Fresno has been tapped to be HCCA’s successor.
Kevin Northcraft, the board’s chairman, stated that his “best case” scenario was as soon as a week.
There was movement towards ensuring a quick transition, Gianello said.
“Community [Medical Centers] is working on an application and a potential contract with the district,” Gianello said.
The reaction from the standing-room-only crowd varied from supportive — of the board’s position — to combative, considering any temporary suspension would leave employees without pay, or jobs, for a period of time.
“We’re stuck — this is a hostage situation,” Xavier Avila, a board member, said.
“Do you let [Benzeevi] pull the trigger, or do you take action?” he asked the public. “This is the lesser of the two evils.”
HCCA’s attorney, Marshall Grossman, and CEO, Benny Benzeevi, didn’t respond to a request for comment in time for this article.