UPDATED: Tulare hospital board to meet Wednesday, consider property purchase offer

Tulare Regional Medical Center’s board of directors will consider a number of offers at its regular district board meeting on Wednesday, January 24, most geared toward moving the hospital to an eventual reopening.

Additionally, one company has made an offer to purchase property the Tulare Local Healthcare District owns at 906 N. Cherry Street, which currently houses the Tulare Hospital Foundation.

The board will consider contracts from Healthcare Resource Group to handle its accounts receivable needs, Alliant Insurance Services to handle employee benefits, and Southeast Personnel Leasing to handle certain legal employment aspects of the hospital’s operations.

 

Pharmacy’s Offer

The offer to purchase the property at 906 Cherry Street comes from Telnet-Rx, a company that, according to its website, provides “remote pharmacy solutions,” pharmacy management, staffing, and consultation.

The company’s website states that the company offers a “pharmacy remote medication order verification service that provides a cost-effective option to facilities that are unable to operate a 24-hour pharmacy.”

In its offer to the district, the company says that it has been searching for property adjacent to the hospital to operate a pharmacy for “the last couple of years,” and that the Cherry Street property provided an ideal location. Another pharmacy, the Cherry Street Pharmacy, is located down the road at 1028 N. Cherry.

Telnet-Rx would purchase the building for $70,000 and provide $35,000 as a down payment. It claims the district owes $57,010.58 in unpaid invoices, which the company would waive.

Larry Blitz, the hospital’s interim CEO, said the offer was unsolicited.

“We had an offer, that’s it — there wasn’t even appraisal,” he said.

Employment Support Services

Southeast Personnel Leasing would provide “Professional Employer Organization” services to the district, hiring the hospital’s employees as its own in order to provide payroll services, background checks, California employment law compliance services, and workers’ compensation insurance.

Although the hospital’s employees would work for Southeast on paper, the hospital’s management would be responsible for hiring, firing, and any personnel decisions — without the burden of handling payroll, maintaining separate workers’ compensation insurance, or handling background checks.

While Southeast offers benefits services, including health, dental, and life insurance, the hospital’s interim management group, Wipfli LLC, is recommending that a separate company be chosen to administer those services.

“[The coemployment arrangement] gives us a huge benefit in regards to workers’ compensation. It’s understandable why people would be really leery of a leasing situation. It’s a coinsurance situation. A leasing — and I think what they’re thinking back to is HCCA – but the agreement is nothing like that, and the district will have total control over the employees,” Blitz said.

“The company that is the coemployer has no control over management, no control over what’s going on, what they are is they’re providing payroll services, and they’re also providing employee benefits that are going to be much more advantageous for our employees in regards to price and the benefits. And that’s all that it is,” he added.

In-depth information regarding Alliant Insurance Services’ proposal was not available in the packet materials made available, but the related agenda item states that the quotes provided were “similar to the previous coverages provided to the employees,” with the caveat that the pricing did not exactly match the prior plans.

Blitz said that the co-employment agreement and insurance proposals were sought to get the hospital up and running quickly.

“We’re building a relationship with quality providers for longer-term coverages in the future. We do not want shady or shaky relationships, we want solid relationships so our employees can depend on excellent benefits and stable companies that will be able to supply that,” he said.

Passing Off Accounts Receivable

Healthcare Resource Group (HRG) has proposed taking over the hospital’s accounts receivable collections, according to the agenda item submitted by Wipfli.

Those services were previously handled by Navigant Cymetrix and terminated by mutual agreement after the company stated it had not been paid for its services since August 2016, claiming it was owed upwards of $1.7m.

If approved, HRG will provide “early out, self-pay” and accounts receivable services to the district, with HRG’s cut of payments ranging from 8% to 18% depending on the age of the account.

The company’s cut of accounts receivable would be 8.5% of any amount collected.

“We found [the accounts receivable] in a state of craziness, in a state of mess,” Blitz said. “This contract will help us secure cash very quickly and find out where we are in terms of old AR.”

Blitz stated that the arrangement was the best possible agreement, and that it was expected HRG would handle accounts receivable for a shorter-term basis. The district won’t be paying anything up front — just the percentages of payments described above.

He said the district doesn’t have the money to hire people locally at the moment and get up to speed — especially when a third party, like HRG, has employees, software, and processes already in place and working for other clients.

“They have an incentive to collect the money, they’ve already perfected the AR, and they have the systems to go out and collect the money in a quick fashion,” he said.

Hospital’s Future

Blitz told the Voice that the hospital’s reopening is still contingent upon three factors: funding, approval of funding by the bankruptcy court and bondholders, and hiring more staff to gear up for a California Department of Public Health survey.

He said that the hospital’s forecasted financials, at the bottom of this article, indicate that the hospital could be profitable with a patient census of as low as 40.

“We’re all very excited about the possibilities,” he said.

Separately, the hospital’s interim management company provided a cash forecast and forecasted income statement, both available below. Representatives from Wipfli will discuss both in-depth at the meeting.

In Depth: Tulare Regional Medical Center

45 thoughts on “UPDATED: Tulare hospital board to meet Wednesday, consider property purchase offer

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  1. Here we go again, OUTSOURCING instead of hiring local people who are quite capable of handle Accounts Receivable, HR etc.
    the Citizens of Tulare have complained for years about not being able to talk with people about their accounts in person. Now going further away to Washingto State, a least the other company was in Souther Calif.

    • Exactly my thoughts. Outsourcing giving some other person control. Not really going to provide local jobs again. Losing control again. Did we not learn anything from this last expensive mess?
      Very disappointed.

  2. Feels like Déjà vu. It literally translates to ‘already seen’. How is this current Board going to convince taxpayers that this is “the only way to go” after the last outsourcing debacle. Perhaps these agencies have sterling reputations but why must we outsource anything that can be handled under local control right here in Tulare as was done for prior decades? This is not going to be an easy sell.

    • Seems like this Board doesn’t know what they’re doing. Are employees ever getting their jobs back? This instability isn’t making employees secure that we’ll have jobs. We want answers, we deserve answers. Tulare Strong means what? Actions speak louder than words. Start doing instead of talking.

  3. These are all good questions and comments. I hope you attend the Board meeting on the 24th and find out what is being proposed and voice your opinion. The Board, as well as the community, are committed to the long term success of the hospital and community participation is essential to the process.

    • Don’t worry, I will be there. I have been extremely supportive but so far what I have heard at the meetings and what ine board member in particular is tellung people just does not jibe. List of questions will be in hand.

    • Employees do not go because this Board and other Boards do not care about us. We shouldn’t have all lost our jobs by them closing the hospital. Rumor is it isn’t going to open. Everyone is mad and they should be.

  4. What federal and state tax id numbers are being used for payroll? This will determine how legal the leasing arrangement is. If you are using the Leasing companies tax id numbers then you must use their benefits. If you are using the hospital’s tax id numbers then you are not leasing the employees back. From this article it seems that there is confusion on what is legal in California in regards to employee leasing and being a plan sponsor for employee benefits.

  5. Where is the contract with Wipfli? What is being paid to this consultant group that was suppose to get the hospital open? Nothing new, same as before, talking about selling property and getting loans and a bond to finish the tower? So what’s different other than the hospital is closed and 520+ people are unemployed and without health insurance. Another scam again. Publish the contract. You published the one for HCCA, what are you covering up?

    • The difference between the two companies is one company operates with honesty, integrity, accountability, does not have greed as their main motivation, and is still operating. The other company has been fired by 2 hospital district’s, didn’t pay their vendors or employees, and had their records confiscated by the District Attorney…. and that’s just a start at the differences….

  6. Healthcare Resource Group was established in 1994 and enjoys a fairly good reputation. They would provide the following positions: Medical Billing; Medical Coding; Denials; Self-Pay Collections; Revenue Cycle Optimization; HIM Optimization; and Complete Business Office. All jobs are located in Spokane Valley, Washington. They are currently hiring for the following positions: Insurance Follow-up Specialist; Medical Biller and Insurance Follow-up Representative; and Help Desk Specialist I. All jobs are located Spokane Valley, Washington. I guess outsourcing is now the “preferred way” for many larger organizations to run their businesses; all very impersonal and antiseptic and more over “physically” unavailable to those who have questions and seek answers regarding medical records and billing information, etc. There are many qualified people who live in Tulare and in the surrounding communities who would seek employment at TRMC to do the work that HRG would be doing. We are not an illiterate uneducated community. This city needs to have locals hired to do these jobs and this hospital should want to hire locals to do these jobs, after all TRMC is a community hospital. TRMC wants community support and I agree that is the right thing for Tulareans to do. Having said that, the locals who live in Tulare and in the surrounding communities want the support from TRMC for both medical services AND employment opportunities. I’m not wild about the idea that the running and operating of the hospital means having no other choice but to outsource management/business instead of filling these positions locally. Again the same can be said about SouthEast Personnel Leasing, Inc. based in Holiday, Florida. Not only will workers payroll be managed in Florida but they would also be employees of SouthEast, not Tulare Regional Medical Center. It looks like our only hope is that these outsourcing agencies do a far better job than their predecessor. I am not a naysayer……I want this Board to succeed in reopening the hospital. Regardless of good intentions, we need to get this done right as this may well be our last chance.

  7. Chris, in your checklist of differences, I noticed you failed to mention transparent, a word this Board used frequently to get elected. Is the contract with Wipfli going to be published, so the citizens know what they are paying for or not? If not, please publish where one can request public records. This Board promised transparency. Are they going to deliver and keep their word?

    • Transparency goes without question…the previous management company had good reason to hide information from the public, but because of the experiences of the last 18 months, the current Board appreciates the public’s right to know and is working hard to make sure requests for information are honored. The hospital District website is Tularehealthcaredistrict.com. If you cannot find the information you are looking for there is contact information for the Interim CEO. A copy of the agreement was requested by the Valley Voice and it is being provided. Anonomously requesting in the comments section of the Valley Voice never worked with HCCA, but this is a new era.

  8. I can understand everyone’s frustration. I myself have been anxious to see the hospital reopen. Let’s not route forget where we came from. Just for such short months ago we finally took control of the hospital that was been under control have a greedy and incompetent management company that left the hospital in shambles. No access to bank accounts no passwords to the computers no cash in the bank and to top it off a $10 million Lean on the assets. Not to mention millions of dollars of unpaid debt thousands of dollars of unpaid wages and the hospital but couldn’t keep a cafeteria running or

    • Ummm “truthbetold”… where ever did you get the idea passwords were not known to the IT department? Please elaborate on this statement. If you can’t elaborate, please leave IT out of this. For everything that’s happened, IT has been the one stable presence so I ask you all, please leave the IT department out of this this type of comment string. Access controls are being maintained and anything asked for by proper authorities, with a warrant, have been shared.

  9. I can understand everyone’s frustration. I myself have been anxious to see the hospital reopen. But Let’s not forget where we came from. Just four short months ago we finally took control of the hospital that was been under control have a greedy and incompetent management company that left the hospital in shambles. No access to bank accounts no passwords to the computers no cash in the bank and to top it off a $10 million Lien on the assets. Not to mention millions of dollars of unpaid debt thousands of dollars of unpaid wages and the hospital that couldn’t keep a cafeteria running or Patients in the room. And now everybody wants this mess to be solved in two months? Let’s be patient and support our local board in hopes that they will be able to get this hospital back on track.

    • I personally don’t think that the timeline in getting the hospital up and running is as important as the “details” in how this hospital is going to be set up and ran. Quick fixes can many times be detrimental. Best to take the time to get it right…. for both the hospital and the community. Good to see the Board is taking the lead in transparency.

  10. What was provided on the link
    is a standard boiler plate contract. What are the fees for service, any per diems etc. how much is being paid to them? That is the question.

  11. Actually, the Board only has a period of public comment, whereas the Board members cannot or should not respond. So really since the VV made public all of the exhorbitant fees
    HCCA was charging the District, why wouldn’t that be public info for this group? They haven’t opened the hospital, did some
    cursory recruitment early on to pacify the community and laid off employees and now they want to
    Outsource? After the last debacle, every citizen should be questioning every move. Period.

  12. So we have an Interim CEO and Imterim CFO doing their best to work on reopening the hospital.
    Two CEO’s ago when we were told the business office would be outsourced, bit locally, that local company was based out of Belleville Illinois. Three years later and another new CEO, we were told we would be outsourced to another company that was local, that company was in Southern California ( Gardena Ca.) does t sound local to me. To my surprise, now they plan to outsource
    $5 million self pays (3250 accounts) to a company in the state of WASHINGTON.
    WHAT, this is the poorest county in all of California, there are very capable people in your own back yard that could do this job. You expect the community to support our local hospital, BUT, you don’t support the locals with employment, what’s that all about? We are in this bloody mess
    Due to all this outsourcing,
    Why did we outsource in the first place, one particular CFO stated to me, “when you outsource, the finger pointing will always go to that company and not come back at us”
    I was reading in the purposal, stating HRG responsibilities
    ‘If they receive 3rd party billing information they will return the account back to the client.’
    What’s that all about, the hospital is the client, who, in the hospital is going to rebill that account.
    They get travel expense, here we go again.
    Please explain WHY you do not want to hire local people very capable of of this follow up and rebilling.
    I don’t get it !!!!!!
    Our success will be our financial core!

  13. Silverlake1944 sounds like an ex employee who was let go with lots of valid information, but it’s more than 3250 self pay accounts. Has anybody been working the current AR since TRMC closed?

  14. No, no one has worked accounts. It was outsource to Navigant/Cymetrix HCCA didn’t pay them, they are owed 1.7 million.
    5.1 sitting in self-pays, these accounts all need to reviewed. 38 million in A/R still outstanding, which are all accounts an insurance needs to pay on

  15. The 3250 accounts are only the self pays, we have the space, we have the computers, why not set up a special collections department right in the hospital and employ the townspeople? WHY go to the state of WASHINGTON.
    There is also 38 million sitting
    Sitting on the A/R with 3rd party coverage that needs to be followed up on, who’s doing that?
    What exactly is HRG going to train people in 2 days on, as in says in their purposal?
    It says they are a billing vendor, then why in their responsibilities does it say if they find 3rd party civerage they will give back to the client?
    Charity Care, is HRG going to take financial information on the patient to determine charity care, if so, will they have authorization to write off the 25,50,75 or 100% of the account?
    If they determine an account is really a bad debts, what collection agency will they go to?
    I just see to many holes in this.
    We have been burnt enough by outsourcing, haven’t we learned anything.
    I think we should be outraged!!!

  16. The 3250 accounts are only the self pays, we have the space, we have the computers, why not set up a special collections department right in the hospital and employ the townspeople? WHY go to the state of WASHINGTON.
    There is also 38 million sitting
    Sitting on the A/R with 3rd party coverage that needs to be followed up on, who’s doing that?
    What exactly is HRG going to train people in 2 days on, as in says in their purposal?
    It says they are a billing vendor, then why in their responsibilities does it say if they find 3rd party civerage they will give back to the client?
    Charity Care, is HRG going to take financial information on the patient to determine charity care, if so, will they have authorization to write off the 25,50,75 or 100% of the account?
    If they determine an account is really a bad debts, what collection agency will they go to?
    I just see to many holes in this.
    We have been burnt enough by outsourcing, haven’t we learned anything.
    I think we should be outraged!!!

    • According to Interim CEO Larry Blitz — I have updated the article to reflect — this was the best arrangement that they could get, because the hospital doesn’t have the money to hire AR staff, get software for AR, and get running. Instead, HRG will effectively be working for the percentages they get.

      He stated that this was going to be a short-term partnership to get the hospital money quickly, all geared towards getting money wherever possible to reopen.

      • Was wondering if he gave you an idea of how long this short-term partnership would likely last…….some ball park figure on timeline…….5 years, 10 years, 20 years?????? What amount of money will need to be raised to purchase software for AR?

        • Probably shorter than that. He stated that the contracts with the employee leasing provider, for example, would be for a year.

    • I totally agree with SilverLake1944. What is behind the purpose behind hiring from Washington when real people with real experience, locally available, can get the real monies owed to the hospital? Something is “off”.

  17. Sorry for the duplication, my comment was not going through, so I had had to choose another name, then they both went through.

  18. Very well stated Silverlake44, I really hope lots of community members show up st the board meeting on January 24. TRMC has a long road to recovery. Without funding , outsourcing might be the cheapest and only way to get the hospital can open again. It will take years to be back at census levels of 10 years ago.

  19. This management group are consultants, they do not hire or fire and they have no vested interest in the community of Tulare, this is just a gig in the string of many. These groups are brought in for turnaround purposes only if they deem its possible. They use the same formula for every place they are hired to go. Hired guns so to speak. So naturally they rely on outsourcing, probably the very same groups they have used in the past. If that is not what Tulareans want, they need to let the Board know that. What bothers me, is that no one knows what they are getting paid. Truly this is not whole lot different than what HCCA proposed to do, at least the evhorbitant fees were published, right down to smoothies and lattes and yet no one is coming forward with this groups fees. Doesn’t anyone else find that odd?

  20. I do, EH you are right on the mark.
    What happens when the hospital opens, who will code and Bill accounts, will HRG be doing that as well.
    I would at least have thought the LOCAL collection agency in Hanford could do what HRG would be doing?
    Still bummed about our A/R going to Washington!

  21. Based on the response Tony gave me about the timeline on short-term partnership, I am very encouraged. Looking at the amount of debt this hospital is in and the decided lack of funds on hand, it make sense to outsource the “financial load” in order to get the hospital open and running (if it is indeed a short-term contract – would like to see the final draft of the contract published prior to signing to verify to the public).

  22. As a citizen I called to find out how many people were on staff. I was surprised to learn that our tax payers money is supporting 8 RNs to be staffed.., with no patients anywhere in sight??? What’s your thoughts on this???

  23. There was a great point brought up at tonight’s meeting, what are ALL 61 employees possibly doing? Is there enough work to keep that many individuals employed at this time? Are they truly busy and what are they doing? I hope money is not being wasted, where is the money even coming from?

  24. I agree EH.., transparency? Also while I was in Fresno I noticed the wipfli office is ajoined to the board’s lawyers office, coincidence? Hmmmmm

  25. Would it be in the best interest if the board/district just sold the hospital? Can someone provide pros vs. cons? I’m thinking the community just needs a new start altogether with an established entity.

  26. I don’t understand some of the negative comments about the new board! It’s only been a few short months since the hospital closed & they have been working above & beyond to reopen our hospital! They are faced with so many difficulties left by the former board & HCCA! I’ve been impressed with their work & am encouraged by their progress. Let’s give them our support & help!

    • One thing I’ve learned from the campaign for and against Measure I and the election campaigns of Kevin Northcraft and Sherrie Bell, is that HCCA is effective at having a few people monitor social media and change the narrative of the article by posting negative comments and misinformation about the subject of the article and make it seem as though many people share that view. On Facebook the number of “fake” profiles to discredit and misinform was plentiful.  These profiles were easy to detect because the profiles had no “friends”, no photos, and often the profile picture was traceable using Google images.  It created the illusion that many in the community shared the same feeling, when in reality it was just a few people, including paid professionals.  Now that the hospital district has cut ties with HCCA one might assume that they no longer have any reason to cast doubt on the new board and direction of the district. However, the continuing legal filings, the leverage they may want to gain in negotiations, and for pure spite, I believe they are continuing this practice using the ability to comment anonymously on the Valley Voice website. I appreciate that the Voice allows for comment after its articles, but I do caution readers that the use of anonymous comments may be used to sway the reader’s perception.  I also think that if the Voice uses anonymous comments in their news articles, they have a responsibility to the reader to ascertain that these are not repetitive views coming from the same source. So keep reading and commenting, but be discerning when reading anonymous comments. 

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