2 bidders interested in Natchez Regional

Published 12:11 am Tuesday, October 22, 2013

NATCHEZ —The consultant working to sell county-owned Natchez Regional Medical Center said Monday negotiations continue with two initial bidders.

Scott Phillips of Healthcare Management Partners delivered an update of the hospital sale process to the Adams County Board of Supervisors during a closed-door meeting Monday.

After the meeting, Phillips said the two potential stalking horse bidders remain “very interested” in NRMC and are having internal discussions about price and other components of the sale.

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“I would say we’re down to a critical point,” Phillips said.

Under the stalking horse model, a bidder negotiates a price for the hospital, signs a contract with the county and puts down a security deposit.

When the hospital is officially placed up for auction, the stalking horse bidder’s price is considered the starting bid.

If no one outbids the stalking horse, the hospital will automatically be sold to the stalking horse.

Two other non-stalking horse bidders, Phillips said, have signed letters of intent to participate in the auction.

Phillips declined to name any of the interested parties, saying it would negatively impact the bidding process.

A delay in the sales process occurred recently, Phillips said, when an executive of one of the bidding companies stopped negotiations for two weeks after experiencing a personal issue. Phillips said negotiations have since resumed.

Phillips said he expects to enter into a contract with a stalking horse bidder in the next few weeks.

County Attorney Scott Slover said the sale of the hospital could be finalized by February.

Once a stalking horse bidder is selected, the supervisors must approve the agreement. When the agreement is approved, the board will pass a sales resolution, which will be advertised for a month before the auction can take place.

During that advertisement period, residents have the ability to file a petition asking for the matter to be taken to a referendum. The petition would require 1,500 signatures.

HMP previously tried to sell the hospital in 2008 after the hospital filed bankruptcy. Though that effort was ultimately unsuccessful, the hospital exited bankruptcy and has continued operations since then.

After seeking an opinion from the state attorney general’s office earlier this year, the county approved using the stalking horse bid process, the same method utilized for the unsuccessful sale in 2008.

The supervisors voted to limit stalking horse negotiations to non-profit health care systems within a 150-mile radius that regularly treat patients from the Miss-Lou. The parent company of Natchez Community Hospital — Heath Management Associates — was excluded from the stalking horse process because it is a for-profit system.

HMA may bid on NRMC when the hospital goes to open auction, which will be open to non-profit and for-profit systems.

HMP Director Clare Moylan said in late September the company has sent out letters to 90 health care systems seeking expressions of interest in the auction while waiting for a stalking horse bidder to come forward.

The effort to sell the hospital began earlier this year after the hospital’s trustees told the supervisors the costs and logistics of implementing the Affordable Care Act, as well as the need to replace the hospital’s aging physical plant, would make continuing the operation of a rural, independent hospital difficult.

Phillips said the ACA has not complicated the sale process.

“If there’s one certainty in health care, it is that payment systems always change,” he said.

Phillips said, however, Mississippi’s rejection of a Medicaid expansion has made selling the hospital more difficult.

Supervisors President Darryl Grennell said he felt encouraged by Phillips’ progress report.

Phillips met with the hospital board Sunday night, he said, and feels hospital and county officials are dedicated to the best possible outcome for Adams County and not just making the hospital sale a political endeavor.

“I think this community has a group of very dedicated leaders trying to work this out, and they have put the time and energy into understanding this process,” he said. “It’s not just a political endeavor … they are concerned about getting the right solution.”

In other news from the meeting:

• The board of supervisors voted to accept bids for the FEMA 361 shelter — which came in approximately $180,000 over budget — in hopes that the Mississippi Emergency Management Agency will provide the additional funding needed for the project.

Supervisors Mike Lazarus and David Carter voted against the motion.

Carter expressed doubt that the county would receive the funding, if it accepted the bids, thus committing to the project.

“If I went and bought something myself, I wouldn’t expect you to give me money for it,” he said.

Grennell said he believed the shelter is needed in the community, especially for Natchez High School. The shelter would be located on school grounds and, Grennell said, provide necessary shelter for students whose class-rooms are largely enclosed in glass.

Emergency Management Director Stan Owens said af-ter the meeting he is confident MEMA will provide additional funding for the shelter.

If MEMA does not provide the funding, Grennell said, the county would likely borrow the money to build the $3.25 million shelter.

• The board voted to spend $4,632 to fund three “essential” positions for Adams County Youth Court, at the request of Youth Court Judge John Hudson.

Youth court lost approximately $260,000 in funding because of cuts to federal grants, which had been supplementing the salaries of youth court employees,

As a result, Hudson said, two youth court employees were terminated.

Youth court has applied for a grant to pay for the salaries of the three essential employees, Hudson said. The grant was supposed to be awarded by Oct. 1, but the government shutdown delayed the decision, Hudson said.

Carter asked the likelihood of the county eventually having to fully fund the positions.

Hudson said that could potentially happen.

Slover explained that the jobs are county positions, but grants had been paying the salaries.

In other words, Grennell said, the county has been fortunate that the salaries have been supplemented by grants. “But these are positions that are essential to the operations of youth court,” he said.

Fully funding the positions would cost the county approximately $55,000 annually, Hudson said.

• The supervisors passed a resolution thanking Tate Taylor, director of “Get On Up,” and his production crew for bringing the filming of the James Brown biopic to Natchez.