Sunflower County supervisors have authorized North Sunflower Medical Center to secure a line of credit of up to $5 million to help the rural hospital manage short‑term cash‑flow concerns tied to billing delays and a pending federal refund dispute.
The action came Monday after the Board of Supervisors emerged from executive session and heard from NSMC Chief Executive Officer Daniel Ceja, who previously served as the hospital’s interim chief financial officer and CFO, and Chief Operating Officer Brooks Rizzo, FNP‑BC, CRHCP, who was appointed Feb. 25.
Ceja told supervisors the hospital is seeking authority from the North Sunflower Medical Center Board of Trustees and the county to establish a line of credit with Planters Bank & Trust Co., with the note maturing around Dec. 15. He said the loan would be secured by the hospital’s accounts receivable and the facility itself and is intended as a backstop for operations and payroll, not to fund bonuses or capital projects.
“We normally average anywhere from $4.5 million to $5.5 million in cash payments every single month,” Ceja said, explaining that recent storms and extended medical leave for key billing staff — including the hospital’s Medicare biller — caused NSMC to fall behind on claims. With staff back on the job and billing “back on track,” he said, the hope is that the hospital will not need to draw on the credit line at all.
“This is just in case we need it to make operations continue, but our goal and our hope is not to actually have to use any of
this money,” he said.
County Administrator Mary Hart noted the county currently has about $29 million in its various bank accounts and that state law already authorizes the Board of Supervisors to back borrowing for the maintenance of the county‑owned hospital. District 1 Supervisor Glenn Donald emphasized that similar arrangements have been used over the past two decades to support NSMC through construction and cash‑flow crunches, and they stressed their desire to keep one of Sunflower County’s largest employers — with more than 500 full‑ and part‑time workers — stable.
Board President Gloria Dickerson said she wants the county to help ensure the hospital remains sustainable while expecting transparency about its financial condition.
“We support you all so that you all are sustainable,” Dickerson said, adding that she did not want borrowed funds used for bonuses while the hospital is asking for help to cover payroll and other essentials.
Ceja responded that NSMC no longer pays annual incentive bonuses and has restructured previously offered payments into retention compensation written into contracts for a limited number of administrators, including himself and Rizzo. He said those retention payments are part of their base compensation and are contingent on fulfilling a full year of service.
“What we were doing in the past were annual incentives, almost like a Christmas bonus, based on meeting certain criteria,” he said. “We didn’t meet all those criteria, and we were not able to make those. The foundation came through and donated money to the hospital to give a retention payment instead, and employees had to sign a contract saying they would stay a full year.”
Ceja added that senior administrators declined any retention funds from the foundation last year and that his own contractual retention payment, due April 1, is separate from the proposed line of credit.
To address long‑term finances, Ceja said he has consolidated positions, including leaving some high‑salary posts vacant after departures, and is working to increase revenue while carefully reducing costs so as not to damage the hospital’s Medicare cost‑based reimbursement rate. That is particularly important, he said, as Medicare Advantage plans continue to replace traditional Medicare and reduce the share of costs that federal programs cover at critical‑access hospitals.
“My theory has always been, you want to get to the break‑even point, you’ve got to increase revenue and reduce costs,” Ceja said. “But we have to be very careful when we do that in a critical‑access hospital, the way we get reimbursed.”
Ceja also briefed supervisors on a separate federal dispute, saying NSMC is part of a multi‑facility effort to recover money under the employee retention credit, a pandemic‑era program Congress later curtailed. He said the hospital initially qualified for about $7 million but never received payment, prompting its law and accounting firms to pursue a settlement with the Internal Revenue Service.
A settlement conference is scheduled for later this month, Ceja said, and while the hospital will not receive the full $7 million, he expects NSMC could net between $3 million and $4 million after fees, if negotiations are successful.
After questions from supervisors about NSMC’s finances, staffing levels and the hospital’s past practice of using retention payments, Dickerson called for action. On a motion by Donald, the board voted to approve a resolution authorizing the hospital to establish a line of credit with Planters Bank for up to $5 million, with the county pledging to levy a tax if necessary to repay the note.
The vote was unanimous.
“Nothing is more imperative than to make this hospital work,” Donald said, noting that NSMC’s payroll supports hundreds of families in the northern end of the county.
Ceja thanked supervisors for their support and acknowledged the weight of the obligation.
“It’s hard to sleep when you have to worry about 500 employees and their payroll — that’s me every two weeks,” he said. “All I can ask is for you all to be behind me and my administration, because we are about to make some extreme changes and cuts, and there will be people coming to you. If you ever have questions, just call me, and I’ll meet you anywhere you want me to meet.”
As supervisors wrapped up the discussion, Dickerson reiterated that the county’s backing comes with an expectation of continued communication.
“We support that hospital,” she said. “We also want to know what’s happening there, that you’re transparent about what’s going on and what kind of condition you’re in.”
