NRMC settles suit, terms unknownPublished 12:30am Thursday, November 29, 2012
NATCHEZ — Natchez Regional Medical Center has settled its lawsuit against its former management company out of court. But the terms of the settlement are confidential — so confidential even the county board of supervisors isn’t privy to them yet.
The $46 million suit, filed in December 2009 against Quorum Health Services, alleged that during the course of Quorum’s management of the hospital from 1992 to 2008, QHS mismanaged the hospital to the point that NRMC’s February 2009 bankruptcy filing was inevitable.
The suit alleged the mismanagement included misrepresentation of the hospital’s assets.
But Wednesday, two days before the case was set to go to trial in federal civil court in Natchez, NRMC’s board of trustees unanimously ratified a settlement agreement that was reached late Tuesday evening.
In a statement on behalf of the board, NRMC’s board attorney Walter Brown said the court in which the settlement was reached had ordered the terms to remain confidential.
“The conclusion of this litigation is a very positive development for Natchez Regional, which, as a public community hospital, is dedicated to the health care and well being of all citizens of Natchez and surrounding counties and parishes,” Brown said. “This settlement will serve as a foundation for our continued mission of the very highest quality health care in Southwest Mississippi and our adjacent parishes in Louisiana.”
Brown said in the coming weeks the hospital board would put into place a plan for the use of the funds.
“(The settlement) will be used primarily for improvement to the parking lot and other pressing infrastructure needs,” Brown said. “We have also talked in terms of need for equipment we don’t now have.”
Unlike all other public bodies, hospitals are exempt from public records laws with the exception of the official minutes of the board of trustees and financial reports as required by statute, and Brown said confidentiality was one of the preconditions of the settlement.
That confidentiality was so broad it excluded even the county board of supervisors, the body that actually appoints NRMC’s board of trustees. Though NRMC has not received a public millage for decades and operates independently of the board of supervisors, Adams County is still liable for its debt should the hospital default.
The supervisors said Wednesday evening they had not been informed of the details of the settlement.
“I am glad that the case has come to a conclusion, that there is some closure that has taken place there,” Board of Supervisors President Darryl Grennell said. “I am glad the hospital now knows something in respect to a settlement, but I don’t know anything about it.
“It would be a courtesy to let us know what is going on — I am not demanding a report, but I would like a courtesy.”
Supervisors Calvin Butler, David Carter, Angela Hutchins and Mike Lazarus all expressed happiness that the settlement was reached, and said they would like a meeting with representatives from the hospital to discuss the settlement. The supervisors said they would request for their attorney to try to arrange such a meeting.
While Hutchins said she was unsure the public would even be interested in the details of the settlement, Lazarus said he thinks it should be made known once things are finalized. Lazarus said he wanted to attend the hospital meeting Wednesday but was not allowed.
“I think once the settlement is signed off and everything, everybody should know what kind of settlement was reached,” he said. “Once it is all final, it should be public record. The hospital doesn’t belong to me or Walter Brown or the board members, it belongs to Adams County, all the taxpayers.”
Lazarus also said he would like to sit down with the hospital board members and encourage them to pay off NRMC’s debt before spending it on anything else.
“I think it would be kind of wise to pay off the debt in case the hospital has financial difficulties again,” he said.
Brown said the hospital has approximately $13 million in debt, but has $40 million in revenues.
“We are well within where we need to be from the debt service,” Brown said. “The real needs are for the property improvement.”
While Grennell said he wanted the courtesy of being informed about the settlement, he wasn’t going to tell the hospital how to spend the money.
“As far as how the money is going to be directed, I don’t want any control there because the hospital has their own people in place that will know how to handle those types of things,” he said.
The law firms of Whiteford, Taylor & Preston of Baltimore and MaxeyWann of Jackson represented the hospital in the suit.