Calais Regional Hospital Files for Chapter 11 Protection

Photo above: 
From Calais Regional Hospital Facebook Page

 

By Pierre Little, Publisher and Managing Editor

Calais Regional Hospital filed for Chapter 11 protection this morning.  Yesterday we requested in writing (see email below) the Implementation Strategy document which is supposed to be based upon the 2016 CHNA (Community Health Needs Assessment). This document is required to be filed with the IRS annually with their Form 990 and we are unsure this document exists. We have not received a response as of 11:30 am today. We are wondering if the CRH Chapter 11 filing is related to this document, in conjunction with the strike vote by the nurses’ union. More to come in this week's issue.

[UPDATE] DeeDee Travis, CRH VP of Community Relations is stating via email to The Calais Advertiser that the document listed on their website (https://www.calaishospital.org/wp-content/uploads/2019/02/10.28.2016-CHNA-FINAL-Calais.pdf) is the hospital’s Implementation Strategy document for the 2016 CHNA.  We have not received the Implementation Strategy document based upon a 2016 Calais Regional Hospital CHNA which is required by statute.  We have yet to be given the correct document.  This Implementation Strategy listed on their website is being based upon a Shared Community Assessment Strategy for Washington County for the 2015 year as detailed in their actual document (page one, second paragraph) which was prepared by outside agencies.  Community means local in our analysis. This is not how the statutes for IRS 501(r)(3) Hospital Services Agencies are read which was brought in as part of the Affordable Care Act. It is a requirement that all Hospital Organizations do a Community Health Needs Assessment (CNHA) every 3 years and the Implementation Strategy document be based upon that Assessment and filed annually with Form 990. Ben Townsend, a lawyer with Kozak & Gayer law firm in Augusta, whose expertise in health care and hospital advisory on strategic planning and regulatory compliance is renown in his field in Maine, said that changes from year to year on services with service reductions or cuts should be added to the Implementation Strategy as an update and filed on the next scheduled regulatory submission with the annual From 990 to the IRS.  When asked about the hospital cuts in specific areas listed as being funded services within the initial Strategic Implementation plan, he said, “in the next [annual] filling they would need to show what actually has happened and would catch up on any intermediate developments [from the initial Strategic Implementation plan]”. This would have huge implications statewide as each year it would be important that hospitals detail changes that remove or cut services from their Strategic Implementation document to the IRS. It seems from our research that CRH is basing its Implementation Strategy upon an old Assessment almost 4 years ago dated November 3, 2015. This document was originally published as the 2015 Shared Community Assessment Strategy for Washington County.  Looking at it now shows its title has been changed.  It may currently be titled 2016, but its title was manually changed by someone in 2016 with a note on the title page “updated 2/29/2016” in what looks like an effort to legitimize the Shared Community Health Needs Assessment with a 2016 notation year to keep them in compliance with the IRS rules. 

The IRS rule under section Hospital Service Organizations is important as it directly impacts the services offered to the Calais community on the ground for the future three-year cycle of services at the time of the assessment and by extension, authorization to receive tax-payer Medicare and MaineCare (Medicaid) payments for services and retain tax-exempt status.

It should be noted that CRH today in our requests did not mention the upcoming Community Needs Assessment for 2019 which is required by law, however, we located an interesting document by Northern Light Health showing a 2019 Washington County CHNA report.  Could this mean that the successor of Calais Regional Hospital will be Northern Light Health? That remains to be seen.

From their press release: 

This morning, Calais Regional Hospital filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Maine. The hospital will remain open and operating as usual during the bankruptcy process, which is expected to last approximately 12 months.

Filing for Chapter 11 protection during debt reorganization enables the hospital to continue providing high-quality health care in local communities and to keep jobs in the region. Chapter 11 is also a tool to restructure legacy and operational debt. The hospital currently employs over 275 people and is one of the largest employers in northeastern Washington County.

Hospital administrators expect minimal impact on operations and staff during Chapter 11. They have requested permission from the presiding court to pay employees in the ordinary course of business. This is a typical request that is granted in Chapter 11. No layoffs are planned.  Restructuring debt will allow the hospital to emerge from Chapter 11 protection on better financial footing.

 

---------- Forwarded message ---------

From: Pierre Little <pierre@thecalaisadvertiser.com>

Date: Mon, Sep 16, 2019 at 2:45 PM

Subject: Implementation Strategy

To: deedee@calaishospital.org <deedee@calaishospital.org>

Cc: <Rod.boula@calaishospital.org>

Hi DeeDee,

These are surely challenging times for CRH.

Can you provide me a copy of the most recent Community Health Needs Assessment Implementation Strategy which was included in your Form 990 to the IRS? 

Lastly, who are Director/Physicians listed on your 2018 Schedule J (Form 990) Part II (page 2)?  Are they the same, (deleted for privacy) and (deleted for privacy)?

Many Thanks!

Pierre Little

--Publisher and Managing Editor

 

The Calais Advertiser, Inc.

The Machias Valley News Observer

23 Church St. 

Calais, ME 04619

www.calais.news

www.machiasnews.com

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