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Court to consider NRMC ombudsman

NATCHEZ — The federal bankruptcy court overseeing Natchez Regional Medical Center’s Chapter 9 filing will decide this week if it needs to appoint a special patient advocate for the duration of the process.

Most of the case’s early filings and motions have been done in Jackson, but at 10 a.m. Thursday the court will hear matters in the Southern District of Mississippi courtroom in Natchez.

One of the key matters discussed Thursday will be the potential appointment of a patient care ombudsman.

“Any time there is a health care-related case that is filed, there is an issue as to whether it is necessary for the court to appoint an ombudsman, someone who will oversee the patient care,” said bankruptcy attorney Eileen Shaffer.

“The ombudsman looks at factors like the quality of patient care, the financial ability of the hospital to maintain that care and the existence of an internal ombudsman program to protect patients.”

While the hospital board has retained its attorney, Walter Brown, as general counsel, Shaffer has been hired to represent the hospital in the bankruptcy proceedings. She also represented NRMC during its 2009 bankruptcy.

The hospital did not have an ombudsman appointed during the 2009 proceedings, Shaffer said, and has filed a motion asking the court to waive the appointment.

The representative from the Office of the United States Trustee has also filed a motion indicating they don’t believe an ombudsman is necessary, Shaffer said, but the issue is ultimately up to the discretion of the judge.

“We don’t think (the ombudsman) is necessary because we have enough internal controls to maintain quality of care,” Shaffer said.

“There is oversight by federal, state and local programs. Any time you interject a third party into a case, it creates a great amount of cost. We would rather see those dollars go to the creditors.”

The Rev. Leroy White, president of the hospital’s board of trustees, said Healthcare Management Partners Chief Executive Officer Scott Phillips took on the de facto role of a patient ombudsman during the 2009 bankruptcy.

The county-owned hospital entered into a similar financial advisory role with HMP in early March, which Adams County Board of Supervisors President Darryl Grennell said at the time was advised by the bankruptcy attorney as a strategic move to ward off a possible ombudsman appointment.

Grennell said he will be in the courtroom Thursday as a representative of the county, which officially owns the hospital, but does not know if he will have any official actions in the proceeding.

White said even as the bankruptcy proceeding moves forward, Natchez Regional is working to finalize an asset purchase agreement with the buyer that recently entered into a letter of intent with the hospital.

While the letter of intent has thus far been kept from public identification by confidentiality agreements, sources close to the sale process said Community Health Systems — the parent company of Natchez Community Hospital — has agreed to purchase NRMC for $10 million with an additional $8 million in taxes paid upfront.

Once the hospital reaches an asset agreement with its buyer, the county supervisors will officially adopt  or reject  the offer. If the supervisors ratify the offer, the hospital will be placed on the market for bid.

If no one outbids the negotiated purchase agreement at sale, the hospital automatically goes to the buyer.

NRMC opened in 1960 as Jefferson Davis Memorial Hospital.

Its $2.4 million construction was underwritten by an $800,000 local contribution and state and federal funds.

It has been financially independent since 1974 and does not receive tax support, but is backed by a 5-mill standby tax that the Mississippi Development Bank required the hospital to get in 2006 when it asked for the MDB to reissue its revenue bond.

The hospital board of trustees announced in February its intention to declare bankruptcy, citing at the time a $3 million deficit between financial assets and liabilities.

The county supervisors appoint the hospital’s volunteer trustees.