Hospital bill awaits OK from governor

Published 12:01 am Sunday, April 17, 2016

NATCHEZ — The bill that will allow the Adams County Board of Supervisors to make up the difference needed to complete the retirement benefits for former Natchez Regional Medical Center employees has cleared the state Legislature and awaits the governor’s signature.

House Bill 1605, sponsored by Rep. Sam Mims, passed the state House April 6 and passed the Senate Saturday.

The legislation as passed clears the board of supervisors to purchase the claim the Public Employees Retirement System has as an unsecured creditor in NRMC’s 2014 bankruptcy action, which ultimately ended with the hospital being sold.

Email newsletter signup

“Now we can sit down with PERS and start working through the numbers,” Board of Supervisors President Mike Lazarus said. “We want to do everything we can to help the employees, but until now we didn’t know if we could do anything to help them.”

The bill would allow the county, if necessary, to take out financing to make the purchase.

With that purchase — which the bill totals at $418,160.48 — PERS will release the retirement benefits it has been holding since the hospital skipped paying the 15 percent employer match to the benefit system from December 2013 to February 2014. The hospital declared bankruptcy in March 2014.

Lazarus said the total approved for includes payments for those who have already cashed out or were not vested in the system.

“I would love to see PERS work with us, because a lot of that is unnecessary spending,” he said. “I hope they will be reasonable with us and come up with a number everybody is happy with.”

PERS has not applied the full time or benefits earned to former NRMC employees even though they paid their portion of the amount, taking the stance that a partial payment cannot be posted.

After the payment is made and the benefits for employees are posted, Adams County will become the recipient of PERS’ stake in the bankruptcy settlement.

Under the court-approved settlement, $4 million from the hospital’s sale to Community Health Systems was placed in an escrow account for two years in case Medicaid and Medicare audits result in any claw back of funds. The hospital’s accounts receivable are also directed to the settlement, called the waterfall in court documents.

The settlement directs that when the accounts receivable and escrow money become available, the first $1 million will be directed to Adams County, the second $1 million will be directed to the unsecured creditors, and the remainder would be split.

The reason for the staggered delivery of funds is Adams County served as a late-stage financer of the hospital bankruptcy process, taking out a $3 million loan to cover the closing costs.

Since Community Health Systems purchased the former NRMC facility, it has merged NRMC with the former Natchez Community Hospital and rebranded the consolidated hospital as Merit Health Natchez.