Offer made for Natchez Regional
Published 12:05 am Tuesday, January 21, 2014
NATCHEZ — An offer has reportedly been put forward for the purchase of the county-owned Natchez Regional Medical Center.
NRMC Board Chairman the Rev. Leroy White said an offer has been made for the hospital, and the board will be meeting this week to discuss it with Healthcare Management Partners Chief Executive Officer Scott Phillips.
HMP was hired last July to help facilitate the sale of the hospital. Phillips also served as a key witness for the hospital when it sued its former management company, Quorum Health Resources.
Email newsletter signup
“There is some development coming down, and we are going to see what it is,” White said. “(Someone) has made an offer, but we don’t know if we are going to accept that offer.”
Phillips will meet with the Adams County Board of Supervisors and members of the press as well, White said.
The meetings of the hospital and county boards will likely be behind closed doors, as have previous discussions about specific details about the sale.
If the hospital board decides the offer is an acceptable one, the county supervisors will still have to formally approve it before the sale process can move forward.
While the offer could not be discussed Monday, White said it involved “multiple bidders.”
Supervisors’ President Darryl Grennell said a meeting with the hospital board had not yet been scheduled as of Monday afternoon.
“Hopefully they will let us know something as soon as possible,” he said.
The hospital sale process has been limited to that of a so-called stalking horse.
Under the stalking horse model — which the hospital has opted to use with the blessing of the supervisors — a bidder negotiates a buying price for the facility, signs a contract with the county and puts down a security. When the hospital is officially placed up for auction, the stalking horse’s price is considered to be the base bid.
If no one outbids the stalking horse, the hospital will automatically be sold to the stalking horse.
Once a stalking horse’ price and standing is negotiated, the supervisors have to approve the agreement.
When the agreement is approved, the board will pass a sale 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 led an unsuccessful stalking horse effort to sell the hospital in 2008, when NRMC was in bankruptcy. The hospital has since exited bankruptcy, but former NRMC CEO Bill Heburn — who retired in October — said in September it was his opinion the hospital would close in two years if it wasn’t sold.
The sale effort began in mid-2013, when hospital administrators and trustees told the board of supervisors the costs and logistics of operating an independent, rural hospital were only going to increase in coming years as more and more provisions of the Affordable Care Act come online.
The cost of improving the hospital’s aging physical plant and the need to be a part of a larger health care system in order to recruit physicians to the area were also given as reasons for the suggested sale.
The suggestion was affirmed in a feasibility report by The Horne Group, an accounting office the county hired to analyze the prospects of a sale as part of the legislatively mandated process.
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.