Tulare hospital board approves RFP, faces financial hurdles

Tulare’s hospital board is working toward finding a new management partner that could potentially enter into a long-term lease of the hospital. That process could get harder after news broke that the board may have lost its chance for $22m in emergency funding from the state — and as the state’s Department of Healthcare Services seeks repayment of $2.4m because of missing paperwork.

Additionally, the Tulare Local Healthcare District’s current interim management partner, Wipfli/HFS Consultants, is facing criticism from the community regarding the expense of keeping staff — including Wipfli itself — working at the hospital while its doors are closed.

 

Management RFP

Board members voted to begin the process of a “targeted” Request for Proposals (RFP) for a potential reopening by October 29 at the latest. After that date — one year from the hospital’s closure — reopening could become impossible.

Wipfli/HFS is recommending the board seek short-term financing and a long-term lease of the hospital, which would require voter approval under California law. The district could then use the lease proceeds to repay its debt and provide additional services to the community.

According to documents provided by the hospital’s interim management partner, Requests for Information would be distributed to healthcare groups as soon as this Friday, with a response deadline of June 5.

Interviews would be held during the weeks of June 10 and June 17 with an ad-hoc committee comprised of two board members and five community members. At the end of the process, the committee would make its recommendations to the board for final consideration and public presentation, with a final Letter of Intent to be signed by the first week of July.

Community Medical Centers and Adventist Health have previously stepped foot on the hospital grounds, Larry Blitz, the hospital’s interim CEO, said.

“We probably have 4 or 5 other firms that are interested, it’s just not public at this point, and we don’t have a formal process,” he said.

Potential partners would need to answer a number of questions, including how their mission would fit in with Tulare’s and whether they planned to invest in the hospital’s construction.

“What we’re trying to do is expedite the process so that those credible entities who are interested will be contacted,” Blitz said. “They will be vetted through a public process — an ad-hoc committee, first — the ad-hoc committee will then submit to the board their finalists. Those finalists will then come before the citizens.”

 

Wipfli Takes Heat

Dr. Patty Drilling and Deanne Martin-Soares, members of Citizens for Hospital Accountability, spoke during the meeting’s public comment section regarding Wipfli’s management of the hospital.

They stated the board should reconsider its agreement with Wipfli, and that paying for the company’s services wasn’t the best option anymore. Blitz, a consultant with Wipfli, called the comments “baseless.”

“I would like to encourage the board to consider and project the prospects of even a few more months of closure, or possibly more. It is time, and some may argue past time, for positions in the interim management team to be eliminated from the monthly expenses,” Drilling said.

She said she was thankful for the company’s turnaround efforts, but that the costs were becoming prohibitive given the hospital’s current status — and that “the only position worth keping at this time is the CFO position.”

Drilling stated that staff payroll totalled roughly $250,000 per month from a $1.4m per month budget — but that, when compared to collections over the last 75 days at $940,000, and payroll over the last 75 days totalling $625,000, the numbers become jarring.

“Decisions like these are never easy, but digging deeper into the black hole of debt is not feasible or responsible when considering how much we all hope for the future of our hospital,” she said.

She added that hospital administrators should consider extending out the hospital’s reopening to ensure the highest quality possible, encouraging them to reach out to the state directly about the possibility instead of having Wipfli do so.

“I would like to also remind the board that we who have fought so hard for over two years are not agreeable to opening for the sake of opening,” Phelps said, “and accepting the mediocrity of the facility or of the care which it will provide.”

Martin-Soares was much more blunt.

“The amount of efforts you are putting into this, while admirable, does not allow the ineptitude of Mr. Blitz to be seen by the board members. In my opinion, it is also creating a shotgun approach to managing the situation,” she said, speaking to Board Chair Kevin Northcraft.

Both speakers’ remarks were met with some applause from the crowd. Later in the meeting, another citizen spoke up — stating the board had the support of the community, but their management partner didn’t.

Bill Postlewaite speaks at a Tulare Local Healthcare District meeting on May 24. Tony Maldonado/Valley Voice

“I’m seeing people in this community that are doing things that Wipfli ought to be doing — I’m seeing things the board’s doing that Wipfli ought to be doing,” Bill Postlewaite, a former Bond Oversight Committee board member and retired school superintendent, said. “You’re a good bunch of people. I think you have the support of the community.”

Blitz says that he’s extended invites to both Drilling and Martin-Soares and received no reply. Drilling denied that she had been extended an invitation.

“I’ve extended invitations to them and other people to come to my office at any particular time,” he told the Voice. “They don’t do that. Their accusations are baseless; our 15 hour days that we’re working — Dan and I are paid the same amount of money, no matter how many hours.”

“I think it’s just sad that they’ve drawn conclusions without really giving me a chance. That being said, they have a right to their opinion, and I still extend any offer to anybody to come to our office and find out what we’re doing 15 hours a day when we’re here,” he added.

He said that the hospital was in the “deepest hole” he’d ever seen when his team came to Tulare after the ouster of the district’s former management partner, Healthcare Conglomerate Associates.

“If Wipfli was not here, you would be closed for the rest of your life. There’s not one person that could come in and do that — it’s a team,” he said. “Considering that we’re owed $2m, this firm has really stepped up because they believe in the mission of what’s going on.”

The firm has only been paid $125,000 of that to date, he said.

Blitz added that there was no indication that the state could extend out the hospital’s reopening.

“Those people who feel they can open a year from this summer — I think that’s very unrealistic, because I don’t believe we’ve got any indication at all from the state or OSHPD that they’re going to extend any license,” he said. “If they don’t extend the license, and we can’t open by October 29, the hospital will never reopen as it is right now. It would pretty much have to be razed and you’ll have to build a new hospital, and that would take five to seven years.”

 

Financial, Status Update

Tulare Regional Medical Center’s Interim CEO, Larry Blitz, left, and Interim CFO, Daniel Heckathorne at a November 2017 board meeting. Tony Maldonado/Valley Voice

Blitz and his team have had conversations with California’s congressional delegation — including Senators Feinstein and Harris, and Congressman Devin Nunes — to connect them to resources and agencies, Blitz told the board.

“[Devin Nunes’] office basically communicates with us on a daily basis,” he said.

Blitz said he was “pretty amazed” at the response of the representatives.

“We’re very selective of when we contact them, because we try to negotiate on administrative means initially and not use the congressmen; but, if we get to a dead end, and we need pressure, or we need access, congresspeople have been very helpful in getting calls returned and getting access to the right people,” he said.

Blitz stated that the hospital was recently assisted by Roseville-based Adventist Health, which operates multiple hospitals in the Central Valley. The company paid the district $275,000 for its inventory of pharmaceuticals, which state officials said could no longer be kept by the district.

“If we didn’t get those drugs out of the pharmacy by that date, our license would have been in jeopardy,” he said.

In his financial report, Daniel Heckathorne, the hospital’s interim CFO and a Wipfli consultant, said that some payments are being withheld from the state due to a $2.4m debt.

The hospital has multiple payments coming in that he expects will still come through, he added.

“We literally rework the cash budget every single day, based on the latest information we receive,” he said.

He told the Voicethe state is demanding the amount after a Disproportionate Share Hospital program audit was ignored by the prior management company.

“We were told by our consultant that the state told them they were not going to send us this money because we owe this $2.4m for the 13-14 year. The money that was supposed to come to us from another program, AB13, they were going to hold because we owe $2.4m from the 13-14 year,” Heckathorne said.

Under the program, hospitals which serve a large number of low-income patients are eligible to receive payments for treating uninsured patients. Federal regulations require that states audit the hospitals that receive such payments, a declaration attached to the claim states.

A bankruptcy claim lodged by the Department of Healthcare Services states that because officials at the time did not comply with an audit of the hospital’s services between July 1, 2013, and June 30, 2014, the state wants all of the money paid under the program paid back.

“DHCS, Myers & Stauffer, and the District Hospital Leadership Forum reached out to Tulare several times asking for the data and Tulare finally sent a few support files to Myers & Stauffer on June 22, 2017. The data that was submitted was incomplete and insufficient for the DSH audit. We again reached out to Tulare asking for the proper data and there was never a response received,” Jillian Mongetta, with DHCS, writes in an attached declaration.

“Since Tulare did not respond to requests to submit Medicaid Cost Settlement support, the Uncompensated Care Costs (UCC) were adjusted to zero for inpatient Fee for Service due to lack of support,” Mongetta writes. “Similarly, since Tulare did not respond to requests to submit Rate Range payments support, their UCC were adjusted to zero for Managed Care due to lack of support. Due to Tulare having UCC well in excess of their DSH payment, Tulare must return the entire amount of DSH funds that they received for payment year 2013/14.”

The hospital’s leadership is hoping for a do-over. They’d like the chance to submit the reports that the prior management didn’t.

“We’re going to talk to our state senator to ask them to speak with the DHS to ask us to be given another opportunity to file the data that was requested for that 13-14 DSH audit,” Heckathorne said.

“We believe we can produce that data that the auditors have requested and if we can produce that and the state were to accept that information, we’re trusting that they would take away the claim for the $2.4m.

“We are hopeful that the state would consider these unusual circumstances and that they would give us an unusual exception,” he said.

In Depth: Tulare Regional Medical Center

21 thoughts on “Tulare hospital board approves RFP, faces financial hurdles

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  1. Northcraft and friends…you started the revolution to get the hospital closed. please fix it! You are proving that your promise is a total hoax. Just look at what the result is now. We desperate need healthcare here. It is too much for you to handle, you should step down.

  2. frustrated = Mickey = Benny

    Benny, you are truly a doofus.

    The board is mopping up your mess. Your selection as manager was ultimately the kiss of death.

    • enuf=idiot
      I am not Benny and I have no idea who is Mickey, but I know you’re Northcraft’s butt kisser.:-)

  3. Does anyone know if Dr B has been charged with any crime? If he Is never charged ( this guy is a crook and was pretty lawyerd up) can he get control of the hospital again? If no entity steps up to fix this hospital would his contract stating he would get first crack at it stand? I sure hope not however I don’t put anything past him or Kumar

  4. Does anyone know if Dr B has been charged with any crime? If he Is never charged ( this guy is a crook and was pretty lawyerd up) can he get control of the hospital again? If no entity steps up to fix this hospital would his contract stating he would get first crack at it stand? I sure hope not however I don’t put anything past him or Kumar

    • It’s been a very costly year with the investigation by the DA. Nothing has come up. The DA is doing this for show until the election. He is going to drag out the investigation until November, and will not show that he was not able to uncover anything to look good. I don’t thin anyone on their right mind want to further invest in this hospital, especially HCCA. They have not been paid either.

  5. Blitz lost all credibility the moment he played the Devin Nunes card. No way has Nunes been in touch with him daily (not even through his office) as Nunes has been obsessively playing Trump’s front man. Nunes hasn’t been interested in the City of Tulare or the County since he took up with Trump and he no longer bothers to pretend that he cares about Tulare. He is being paid to be Tulare County’s Representative in the House but he doesn’t spend his time working on Tulare County’s behalf…..nooooooooo he’s too busy working to protect Trump.

    In regards to Drilling and Martin-Soares, they are both extremely knowledgeable about the ins-and-outs of TRMC’s financial trials and tribulations, probably more than the entire hospital board put together. I hope the board listens to these women even though they are not saying what the board “wants” to hear….but they are saying what this board “needs” to hear. It is quite evident that the hospital is seriously bogged down and embedded with deep excessive debt and legal entanglements. It may well be too much of a deep dive to pull it out of the muck. Like quicksand….the more you struggle the more you get sucked down into the mud. This sucking sound actually started when an overly ambitious hospital board wanted to compete with Kaweah Delta in size and scope even though they were quite aware that Tulare did not have the tax base or size of population to support such an expansion. As a city we need to be prepared for the possibility the hospital won’t be reopened. We need to be thinking outside the box.

    Other options could be considered. Many small towns across this nation whose hospitals closed went on to convert and lease out the hospital buildings to house medical service facilities. TRMC has plenty of buildings which include the rooms and floors in the main building to accommodate some if not all of the following and would bring in much needed revenue to go toward paying off the millions of dollars of debt. If I am not mistaken none of these types of medical facilities requires a hospital license. (1) Hospice Care Facility (modeling the quality of care much like Kaweah Delta’s Hospice). (2) Rehab and Skilled Nursing Facility – Can’t have enough of these facilities – there is always a waiting list. (3) Urgent Care (with X-Ray and Lab facilities included) – for many years people had been using TRMC Emergency Room as an “urgent care facility”, which this town severely needs. It could be a 24-hour Free Standing Urgent Care Facility and it would be in the required 20 mile distance to a hospital (Kaweah Delta is 8-10 miles). Yes I know Tulare already has an urgent care facility but is it a 24-hour facility with x-ray and lab facilities onsite? Does it have ambulance bays for ambulance parking? Does it have enough on-site parking spaces available for patients? Has to be big enough to take the load off Kaweah Delta ER, during the day, night-time, and weekends. (4) Medical Offices – Would be great part-time offices for those Visalia doctors who also have plenty of Tulare patients that they treat. (5)Exercise/Physical Therapy Classes for special needs clients and the elderly with mobility issues. (Evolutions doesn’t cater to this population). (6) Onsite cafeteria (modeling the quality of food service and menus much like Fresno Valley Children’s, which is a serious money maker).

    • We need a hospital and to claim Drilling and Soares are smarter than the entire board combined is ridiculous

    • Barbara, . Blitz might be telling the truth about Nunes. Nunes office helped me greatly with my problems with the IRS. Believe me, I am just “joe average” but I was amazed at how much effort his office made to help me. I will always be indebted to Nunes and his office. They made the IRS call off their dogs. I am one little piece of Tulare county that Nunes did not forget.

      • Interesting ……… You must be the one in a million that has benefitted from the Nunes Office. “joe average”…” the one little piece of Tulare County that Nunes did not forget” ? Such a understated way to describe yourself. And now you will always be indebted to Nunes and his office? Really? Well now, perhaps the amazing Nunes Office can sweep into Tulare and single handedly save our hospital. We all know just how powerful the IRS is and if they (the Nunes Office) have that kind of clout and pull then saving our hospital will be like taking a walk in the park for the Nunes Office. 🙂

        • I didnt say that I was indebted. Im simply saying “Lets try to be open minded and fair” . Of course that is a difficult challenge for anyone who is foaming at the mouth as you are. All emotion, no thought. How do you KNOW that Nunes hasnt been trying to help us with our hospital problem. HOW DO YOU KNOW THAT. Do you work in Nunes office.? HOW DO YOU KNOW! All you KNOW is that you hate Trump.

          • If you have verifiable proof that Nunes has been actually trying to assist in our hospital problem then by all means offer up that verifiable proof. I have no problem with being corrected by verifiable facts. If I’ve got it wrong then please show me. That said “tularepatriot”, it really isn’t necessary to shoot down the messenger just because you don’t like the message. After all we can all respectfully disagree.

  6. Each day more and more light is shed on that thief Benzeevi but we always leave a very important player out. That is Benzeevi’s CFO, Alan Germany. That man, who was paid 49,000.00 per month and an additional 8,000.00 a month, has been huge reason our hospital is in such deep water. Why didn’t he send the State the info they requested for ‘13-‘14? Wasn’t that his job to make sure it got done? Wasn’t his department in charge of making sure there is cash to make payroll or how about making sure the millions of outstanding invoices were entered? Oh yeah, he was busy transferring money between Tulare and Lone Pine. He made sure he was paid. Why didn’t he present a budget whe. We requested it when Benny wanted the bond measure passed or when Benny wanted those millions of dollars loans? When State is done with this audit and they are ready to prosecute Benny, I truly hope Alan Germany is handcuffed to him.

  7. I apologize for all the typos. It happens when I’m frustrated. I am also extremely frustrated with administrative and accounting staff who knew what was happening.

  8. Let’s not forget Kumar he was right in the middle of this , stalling Senovias placement on the board while he was giving private tours to the suits who handed evolutions to Dr B, it sickens me how he used his position as a physician to take advantage of this town and shame on all of you on the past board who were to afraid or in on it to ask questions , how any of you sleep at night is beyond me. As are hospital stays closed Dr Kumar and his misses somehow weaseled their way into Sierra View which makes me wonder why would they take on such a toxic couple.
    Here is how I would think outside the box , Have an ER only with the supporting departments Lab, X-ray etc, no icu, no medical floors or OB we just don’t have the proper Drs or staff to have these areas opened ,Contract with a UCLA or UCSF to transport the most critical patients to their facilities, contract with CRMC to take all other low level patients. Other small communties in other states have done just this. Bsascially to tie into what Barbara suggested have a mini Santa Barbara clinic with an ER that’s it , This idea of opening up to someone to Manage this hospital is insane when will you people learn your doomed-to repeat the mistakes of the past, Dr B just put in motion what was going to happen in a few years anyway …. a closed hospital. I feel if you were able to contract with a big name hospital ( not KDH which really isn’t any better than Tulare ) you might be able to regain the respect and trust from the community, the trouble with this town is everyone knows or has a connection with someone and in turn doesn’t want to hurt feelings or their businesses it’s time we say what needs to be said this town doesn’t have the time to be tip toeing around . Sorry for scattered thoughts but I’m frustrated also.

  9. Dr Drilling and Deanna pretty much nailed it. Wipli is only an interim and they are getting paid way too much for what they deliver, they are only caretakers and are owed $2 million.

    There is far too many staff on site doing what ? calibrating broken equipment and writing policies. A jobs program and Wipli won’t touch it because they are getting alot more and dont wanna call undue attention to salaries. This one is a no brainer. Outsource.

    By all means avoid hiring one of the idiots like the consultant CRMC has planted on site. He is a tool and bona fide incompetent. Get a solid outside administrator or CFO like Deanna suggested, there are some good people around who have knowledge without Wipli’s massive consultation fees

  10. Of course the credibility of HFS /Wipfli should be questioned, after all they had a consulting contract with the District while HCCA was managing. That’s what these folks do. They all know each other in the consulting world. They are getting paid more than HCCA while the hospital is closed. Shouldn’t there be outrage on that? Then you put out a fast RFP timeline when you have already stated two entities, Adventist and CMC have already assisted and been onsite. That is no process and clearly a conflict. Those management yahoos are taking you for a ride, don’t kid yourself, a deal has already been discussed and done and The Board just keeps going along.. no transparency, closed hospital, 500 unemployed and they keep listening to a person who’s healthcare company claimed BK, yet spouts about fiscal issues, a local dentist, riding on the coat tails of her father, what does she know about hospital management?? Geez when are you people going to wake up and stop making the same mistakes over and over? And you think you deserve a 22m bailout after you voted down a bond?? No I don’t think the rest of the State feels you are owed for your continued lack of oversight, leadership, and history of poor decisions on management.

  11. Well, well, well, let the circular firing squad continue and at the end of the day you’ll be millions of dollars in debt and no hospital to show for it.

  12. These board members should be put into question, especially Northcraft and Jamaica. Since 2016, they saw this entire thing going down and instigated the bad publicity to get the hospital to lose members and credibility and income. I am at a total loss for what these board members are trying to do. They are incurring more debt with who they are hiring while the hospital is closed. If the hospital doesn’t reopen by the end of October, there is no chance of reopening this hospital. Even the state doesn’t want to invest in this fiasco! I don’t blame them. I have to agree with EH, while the dentist has a few good points, she’s a dentist. What does she know about running a hospital? Everyone involved here is pretending to know what they are doing. These board members should do all that they can to get the hospital to reopen. It is so much more costly and difficult to close and then to reopen the hospital. Why didn’t they just negotiated to end the contract with HCCA than going through the bankruptcy route to kick out HCCA? Why did they hire another management company that is even more costly and is completely incompetent? They should have approved of the loan last year when the hospital was open to pay debts while trying to reconfigure and negotiate with HCCA to end its contract? No one is going to give them a loan now with a bankrupt hospital.

  13. Blame is unending, it is time to stop fixing blame and fix the problem
    – You have 35 M in debts.
    -You need 25 M to open inpatient facilities.
    By 2030 you will need to raze present structures and build a $100 M plus seismic compliant building. It takes 7-10 years to accomplish it.
    – For all healthcare districts and systems , inpatient is “loss leader” and they survive on ancillaries eg. Lab, Imaging, ER, Therapies, Dialysis, Outpatient surgery, Cancer treatment, Clinics, urgent cares, medical office leases, wound care, women’s health etc.
    Most barely scrape by with 1-3 percent operating margin.
    -Inpatient services require full specialty services.
    – Hospital based groups eg Anesthesia, ER, Hospitalists, Intensivist, all require subsidies from hospital specially in our area with poor pay mix.
    -Nearly all private pay citizens are established with Visalia area PCP’s and specialists.
    -Nearly all physicians have offices or admit to Kaweah, which has become a powerhouse with a very forward thinking leadership, its Foundation and ties with managed care entities.
    – Tulare district has been stripped clean with a series of shysters-Doctors, Lawyers, Administrators, Managers.
    – There will be any outside “white knights’- State, CRMC or Adventists and if one comes, they will redirect all services to their advantage and not Tulare.
    These are observations, everyone is entitled to their opinions.
    To me, looking in from outside only long term viable option is to quit this obsession with Inpatient facility and work with local parties to develop thriving local ancillaries and arrange inpatient care at other local hospitals for residents

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