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Another Rural Hospital Once Owned By North Kansas City Company Is In Dire Straits

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The federal government has terminated I-70 Community Hospital's Medicare contract, citing deficiencies that jeopardized patients' safety.

In mid-February, I-70 Community Hospital in Sweet Springs, Missouri, took the unusual step of voluntarily suspending its own license after state regulators said it was “out of regulatory compliance.”

The 15-bed critical access hospital said it planned to reopen in 90 days. But now the path forward has become steeper.

On Thursday, the Centers for Medicare & Medicaid Services cut off the hospital’s participation in the Medicare program. CMS cited deficiencies that are “so serious they constitute an immediate threat to patient health and safety.”

The rural facility, about 65 miles east of Kansas City, is the latest hospital once run by EmpowerHMS, which used to be based in North Kansas City, to find itself in regulatory and financial trouble.

Empower is no longer in charge at I-70 Community Hospital. A court-appointed receiver, Cohesive Healthcare Management & Consulting of Shawnee, Oklahoma, is now running the show, and it says it plans to contest CMS’s decision.  

“We’re in the process of developing an appeal to that,” said the hospital’s interim CEO, Roland Gee. “Our corporate staff and legal staff are beginning to work on that.”

The hospital opened more than a dozen years ago and employed about 50 people.

The hospital and an adjoining clinic remain closed, but Gee said the hospital is working on a plan to address the deficiencies that would allow the hospital and clinic to reopen. He declined to go into specifics other than saying it’s “based on the reports that were furnished to us by CMS from their investigations.”

“There are just a lot of moving parts right now,” he said.

Sweet Springs has a population of around 1,400. The closest hospitals to town are in Clinton, Marshall, Sedalia and Warrensburg, Missouri.

I-70 Community Hospital’s closure last month roughly coincided with the closure of another EmpowerHMS-run hospital, Oswego Community Hospital in Oswego, Kansas, about 160 miles south of Kansas City. The 12-bed facility closed abruptly after saying it was unable to cover its operating expenses.

Two other hospitals once run by EmpowerHMS– Hillsboro Community Hospital in Hillsboro, Kansas, and Fulton Medical Center in Fulton, Missouri – have been placed under new management after they struggled to make payroll and meet other financial obligations, and ran short on supplies.

Adding to Hillsboro Community Hospital’s woes, CMS recently cited it for serious deficiencies, including a failure to follow its chest-pain procedures for three patients with cardiac complaints and two patients for suicidal thoughts. CMS also said the hospital had failed to provide laboratory services “for medical management of emergency conditions.”

The hospital’s CEO did not return a call seeking comment.

Other hospitals run by EmpowerHMS have experienced similar financial problems recently. Last week, an Oklahoma judge ruled that Fairfax Community Hospital in Fairfax, Oklahoma, was insolvent and named a receiver to take over its operations. And as of last week, employees of Horton Community Hospital in Horton, Kansas, had not been paid since Feb. 15.

In January, Florida-based iHealthcare entered into agreements with Jorge A. Perez, the Florida resident who led EmpowerHMS, to provide hospital management services to Empower’s hospitals. In exchange, Perez was eligible for about $2.5 million in “success fees” if certain conditions were met.

The hospitals covered by the agreements included I-70, Oswego, Hillsboro, Fulton, Fairfax and Horton. Other hospitals covered by the agreements are:

  • De Queen Hospital in De Queen, Arkansas
  • Drumright Community Hospital in Drumright, Oklahoma
  • Haskell County Community Hospital in Stigler, Oklahoma
  • Lauderdale Community Hospital in Ripley, Tennessee
  • Prague Community Hospital in Prague, Oklahoma
  • Regional General in Williston, Florida
  • Washington County Hospital in Plymouth, North Carolina

Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies.

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
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