Gillon OKs Quorum contract

Published 12:00 am Thursday, September 30, 1999

Under Natchez Regional Medical Center’s new management contract with Quorum Health Resources, the county-owned hospital will pay Quorum $200,000 for the year 2000 as a base fee for services. That’s $20,000 less than what the board would have paid the company under the old contract, said hospital board attorney Walter Brown.

Billy Gillon, president of the NRMC&160;Board of Trustees, signed the contract while at a seminar in Jackson. Chuck Ellis, state officer for Quorum, was also present at the signing at the Jackson Hilton Hotel.

Under negotiation since June, the signed contract will be added to the minutes of the hospital’s board of trustees at their Oct. 11 meeting.

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&uot;We’re just glad to have the contract complete,&uot; Brown said. &uot;I know the board of trustees is anxious to establish continuity at the hospital, and this contract should help to accomplish that.&uot;

The five-year contract took effect at midnight Thursday. It states that in addition to other services, Quorum will provide a permanent administrator and controller at an annual cost of $200,000 in the year 2000. That cost will rise a maximum of 3 percent each year as an inflationary adjustment.

In 1992, the base fee paid to Quorum under the original contract was $176,000 per year with inflationary adjustments each year.

&uot;Under the old contract, our fee to Quorum for this year would have been $220,000,&uot; Brown said.

In recognition of the layoffs and other adjustments that the hospital has made, Quorum took a 10 percent cut to $200,000 in this contract, he said.

According to Brown’s calculations, at the end of the five-year contract, NRMC&160;will pay no more than $215,000 per year.

Under the contract, Quorum will be responsible for management of personnel, budgets and expenditures and revenues of the hospital.

Brown said the new contract is similar to the old contract in many respects.

&uot;A performance evaluation based on the actual picture of the hospital is built into this contract,&uot; he said.

Major financial losses could void the contract.

&uot;There’s nothing in the contract to compensate for the Balanced Budget Act,&uot; Gillon said. &uot;Under the contract, if we still have losses – as defined on audited financial statements – that exceed $1.5 million, we could void the contract.&uot;

Under the new contract, NRMC will seek a new, permanent administrator. Karen Fiducia will continue as interim CEO until a new administrator is brought in.

Gillon estimates that by the end of November, NRMC will go through an interview process for an administrator and will have a new administrator installed by the end of January.

Current hospital controller, David Cronic, is a permanent member of the Quorum management team in Natchez.

Quorum’s previous contract with NRMC was signed in 1992, one year prior to the Mississippi Tort Claims Act, Brown said. &uot;This is what took so long to negotiate in this contract,&uot; he said. &uot;We had to work out Quorum’s and the hospital’s liability and indemnification under the new act.&uot;

Areas of liability for a hospital can include negligence, Medicare fraud and accounting fraud.

&uot;Quorum made some serious concessions,&uot; Brown said. &uot;We’re as protected as we can be.&uot;

Based in Brentwood, Tenn., Quorum employs 18,000 people in 44 states and Washington, D.C. Quorum currently manages 255 hospitals across the United States, including hospitals in Vicksburg, Centreville and Greenville.