Lawsuit filed against hospital; judge appoints temporary receiver

By Anita Reding

Staff reporter

A lawsuit has been filed against the group that operates Haskell County Community Hospital, and a judge has issued a temporary injunction and appointed a temporary receiver for the hospital, court documents state.

Cohesive Healthcare Management & Consulting LLC has been appointed receiver and will operate the hospital on a temporary basis and provide reports to the court.

Associate District Judge Brian Henderson issued the ruling regarding the hospital receivership at the conclusion of a hearing in Haskell County District Court on Monday, March 11. The hearing included testimony from hospital employees, a representative of the City of Stigler and a representative from Cohesive.

Monday’s hearing was scheduled after attorneys for the City of Stigler, Haskell County and the newly-formed Haskell County-Stigler Hospital Authority II filed the lawsuit, and requested and received a temporary restraining order on Wednesday, March 6 against the group that manages HCCH, according to court records. 

The defendants in the case are CAH Acquisition Company No. 16, LLC; HMC/CAH Consolidated, Inc.; and iHealthcare Management II Company, court documents state. The defendants did not attend the March 11 hearing.

The lawsuit states, “In this action, Plaintiffs seek, among other things, damages under the Purchasing-Lease Agreement and the existing lease, as well as equitable relief including (i) termination of the existing lease of CAH 16, or alternatively, termination of the implied contract between Haskell County and CAH 16 and HMC, (ii) termination of the management agreement between CAH 16 and iHealthcare, (iii) emergency appointment of a receiver over CAH 16 in order to continue uninterrupted operations of the hospital, and ultimately, (iv) the eviction of CAH 16, HMC, and iHealthcare from the hospital facilities. The monetary amount in controversy is in excess of $75,000.” 

“Injunctive relief is necessary to prevent immediate and irreparable harm to Plaintiffs as well as the hospital, its patients, the residents of Haskell County and the surrounding area,” the plaintiffs stated in their petition.

The temporary injunction prohibits the defendants from destroying, removing or prohibiting access to all documents required to operate the hospital. Those documents include the hospital’s license and Medicare and Medicaid Certifications, court documents state.  

During Monday’s hearing, Dr. Steven Woodson, hospital CEO Don Buchanan and HCCH Human Resources Manager Darla Barger were called as witnesses, and they provided information regarding issues that are affecting employees and the hospital’s ability to provide health care.

Those issues include lack of payroll funds, dwindling medical supplies, late payments for liability insurance and lack of payment for medical services for employees with health insurance.

The hospital is currently unable to admit patients and provide certain services due to lack of supplies. “Our supplies have dwindled to a critical level,” Woodson said.

Buchanan and Barger said they had contacted representatives of the management group numerous times regarding multiple issues the local hospital is facing. They were told that management was working to resolve the issues.

Barger said hospital employees have not received payroll funds that were scheduled for Feb. 15 and March 1. 

Stigler City Manager Bobby Mouser was also called to provide testimony. He said there has been a “steady degradation of services offered over the past few years” at the hospital. He added that his comments regarding the hospital were not directed toward the hospital employees. “Couldn’t ask for better members of the community than the employees,” he said.

Cohesive manages four critical access hospitals and has been appointed as receiver for three other hospitals faced with situations that are similar to those at HCCH, Kathy Hammons, president/CEO, said during her testimony on Monday.

Hammons said if Cohesive was appointed as the receiver, they would be focused on performing assessments, getting paychecks to employees and working with each department in order to provide services to patients. She told the judge that Cohesive would not provide back pay for employees, but would pay them for their work going forward. 

Hammons said after the hearing on Monday that representatives from Cohesive would be at HCCH the next morning.