a year later Private equity-backed Noble Health closes two rural Missouri hospitalsPatients and former employees are battling a broken local health system or losing millions in unpaid wages and benefits.
Hospitals in Audrey and Callaway counties are closed as a series of lawsuits and state and federal investigations proceed.
In March, Missouri Attorney General Andrew Bailey confirmed a civilian investigation. He previously told local talk radio that an “investigation” was underway into the “hospital issue”.
Bailey’s comments came weeks after the US Department of Labor’s Employee Benefit Security Administration notified officials affiliated with Noble Health, a startup, that it had violated federal laws and was charged $5.4 billion to cover unpaid employee health insurance claims. million, according to a 13-page letter detailing the “interim findings” obtained by KHN.
January confirms letter KHN’s previous reporting, which was reported by staff and patients who described missing paychecks; receiving unexpected, high-dollar medical bills; and going without care, including cancer treatment. According to the letter from federal investigators, Noble Hospitals and their corporate owners collected employee contributions for medical, dental and vision insurance in 2021 and 2022 but then failed to fund the insurance plans.
The letter stated that owners and officials were “aware of the harm caused to participants and, in some cases, were making efforts to resolve complaints from individual participants,” and that “the volume and severity of complaints and bills notwithstanding,” he failed to answer.
Doing ‘Tomfoolery’ and ‘Everybody’s Dirty’
Marissa Hadorn, who works as a hospital laboratory technician, has spent much of the past year trying to start a new job, care for her 2-year-old son, who was born with spina bifida, and pay for unpaid medical bills. was struggling He told KHN that the family owes at least $8,000, of which $6,000 is in collections for special care for son Ryder in St. Louis. As a Noble employee, Hadorn said, she was repeatedly told that her employee health insurance would cover the rider’s care. It did not happen.
Noble “does everybody dirty,” she said. “We would just like to take some responsibility by this company who didn’t feel the need to get their act together.” Hadorn’s story of unpaid bills, first reported by local newspaper, Mexico Ledger, is common among former Noble employees a year after the hospital’s closure.
A former Fulton Hospital employee has filed a class-action lawsuit aimed at representing hundreds of employees at both hospitals.
A January 13 letter from federal authorities sought responses by January 27 from Noble corporate and hospital officials, as well as Platinum Neighbors, which bought the hospitals last April and assumed all liabilities. The letter directs officials to contact the agency “to discuss how you intend to correct these violations, fund participants’ claims and obtain compliance.”
Former employees say that their claims have not been paid yet. Labor Department spokesman Grant Vout said the agency cannot comment on an ongoing investigation.
Separately, the Kansas Department of Labor is reviewing Noble and Platinum’s failure to pay wages and severance to corporate employees. Agency spokeswoman Becky Schaefer confirmed that half a dozen cases totaling more than $1 million in unpaid back wages and severance claims went to trial in early February.
Dave Kitchens was among those who filed a claim against Noble Health. Kitchen worked briefly as a contract employee and was then hired as a corporate controller in October 2021, an accounting role in which she was responsible for financial reporting and data analysis. Kitchen provided KHN with an audio recording of his hearing and is expected to eventually be paid more than $90,000 in lost wages, benefits and severance pay. During the hearing, Kitchen told the administrative judge: “I would just like to be paid what I am owed.”
Kitchen, who has also been named as a fiduciary on the federal investigation, said he was not on Noble’s executive team. When asked by Kansas Administrative Law Judge James Ward whether he expected Noble or secondary buyer Platinum to pay his wages, Kitchens replied that he “had no idea who was in charge.”
“I believe there was some tomfoolery,” Kitchen said.
A ‘rabbit hole’ of responsibility
Noble was launched in December 2019 with executives who had never run a hospital, including Donald R. Peterson, who prior to joining Noble was accused of Medicare fraud. According to the Health and Human Services Office of the Inspector General, Peterson settled that case without wrongdoing and in August 2019 agreed to opt out of Medicare, Medicaid and all other taxpayer-funded federal health programs for five years.
By March 2022, hospitals was closed And Noble offered explanations on social media, including “a technical issue” and the need for hospitals to “restructure their operations” to keep them financially viable. In April, Texas-based Platinum Neighbors paid $2 for the assets and all liabilities, according to the stock purchase agreement.
Despite receiving approval for nearly $20 million in federal Covid-19 relief money before the hospitals were shut down — whose use is still not fully accounted for — according to court records, Noble struggled to pay his bills. was closed. Contractors including nursing agencies, a lab that runs Covid tests and landscaping have sued, seeking lakhs.
In Audrain County, where community members still hope to reopen the hospital or build a new one, county leaders sued Noble for repayment of a $1.8 million loan. Jay Wasson, a former Missouri state senator, also filed a lawsuit in September seeking repayment of a $500,000 loan.
Two Noble Health real estate entities filed bankruptcy petitions this year. A Chapter 11 bankruptcy filing designates the Fulton Hospital property in Callaway County as an asset and lists approximately $4.9 million in liabilities. Noble Health has been included as a codebetter in the third bankruptcy filing by FMC Clinic.
In the US District Court of Kansas, Central Bank of the Midwest is suing Nuterra Capital over the $9.6 million loan Noble used to buy Audrey Hospital. The bank alleges Nutera, a private equity and venture capital firm that included Noble as part of its portfolio in 2022, signed on as the loan’s guarantor.
Federal investigators listed about a dozen people or entities affiliated with Noble Health as fiduciaries who they say are personally responsible for paying out millions in unpaid medical claims. The letter also detailed the ownership of Noble Health for the first time. With 16.82% of the shares among the owners are William A. Solomon with a 16.82% share, Thomas W. Carter, Peterson Trust with a 19.63% share, and NC Holdings Inc. with 46.72%.
NC Holdings is also listed on the stock sale agreement with Platinum, along with a number of signatories including Jeremy Tacsett, chief executive officer of Nueterra Capital.
Tasset did not respond to a request for comment for this article. In an email to KHN in March 2022, Nutera Capital’s CEO wrote, “We are a minority investor in real estate and have nothing to do with the operation of the hospitals.” In May 2022, Tasset wrote in an email to KHN that “everything (real estate included) was sold to Platinum Neighbors, a subsidiary of Platinum Team Management.”
It is not clear who owns and controls the Peterson Trust, which has been identified by federal investigators. Peterson, who is listed in Noble’s state registration papers as a director and in other roles, did not respond to requests for comment for this article. He previously told KHN that his participation in Noble did not violate his exclusion from studying law.
He said he owns 3% of the company, citing guidance from the US Department of Health and Human Services’ Office of Inspector General. Federal regulators can exclude companies if a restricted person owns 5% or more.
In March 2022, Peterson created Noble Health Services, which federal investigators noted in their letter “was established to reorganize the ownership of several Noble entities.” Peterson dissolved that company in July 2022, according to Missouri business filings.
In September, Peterson posted on LinkedIn that he was “sitting in an Emirates Air lounge in Dubai” to complete due diligence on “starting a new business”.
A 2013 OIG advisory states that “an excluded individual may not serve in an executive or leadership role” and “may not provide other types of administrative and management services … unless otherwise required by federal health care programs.” be completely unrelated to.”
KHN investigated the federal system meant to prevent healthcare business owners and executives from repeatedly billing government health programs and found that failed to do,
The OIG maintains a public list of people and businesses it has banned from all federal health care programs, such as Medicare and Medicaid. KHN’s review found it devoid of monitoring and rife with legal gray areas.
In the wake of KHN’s reporting, Oregon Sen. Ron Wyden, a Democrat who chairs the powerful Senate Finance Committee, said, “It is imperative that federal watchdogs can ensure that bad actors are kept out of Medicare.” Sen. Chuck Grassley (R-Iowa) said the government needs to do more and that “it is also up to private sector entities to do a better job checking against the exclusion list.”
“We can’t just depend on one or the other to do everything,” Grassley said.
In recent months, Missouri hospitals have more than doubled sales, according to public records. Oregon-based St. Pio of Pietrelcina notified state officials of the change in ownership in December and requested an extension of the hospital’s license, which was denied. In January, Audrain County officials, in their lawsuit, revealed another owner named Pasteur Medical, which was registered as a Wyoming company on December 27, 2022.
“We haven’t come out of the rabbit hole on this,” said Steve Bolin, director of the division of regulation and licensure for the Missouri Department of Health and Senior Services. Bolin’s agency, which oversees and approves hospital ownership changes, said it would support its agency conducting the financial review.
“Maybe it’s not a bad idea to do a little deeper dive. We don’t have that many changes of ownership, but we’ll need the right staff to do that, including some really good CPAs.” [certified public accountants],
Kaiser Health News is a national health policy news service. This is Henry J. is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.