Greenwood Leflore Hospital officials are considering legal action after the Leflore County Board of Supervisors on Wednesday denied the hospital’s request to draw more than $1 million from a credit line established to keep the financially endangered hospital afloat.
CEO Gary Marchand said in a memo to hospital employees on Thursday, “The hospital is also assessing its legal options in as much as no residents opposed the line of credit at public hearings and the hospital is being denied access to funding in accordance with the loan agreements.”
The Board of Supervisors in recent weeks declined to act on the hospital’s latest request for a draw on the $10 million line of credit secured earlier this year from a consortium of five local banks. The borrowing mechanism was set up to buy the hospital time while it pursued a federal designation that hospital officials have said would ensure its long-term viability.
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In Wednesday’s special called meeting, the board voted 3-2 to deny the request, with the majority expressing skepticism about the likelihood of the critical-access application being approved and displeasure with the hospital’s administration.
Voting against authorizing the draw were District 2’s Reginald Moore, the board’s president; District 5’s Robert Collins, vice president; and District 4’s Eric Mitchell. District 1’s Sam Abraham and District 3’s Anjuan Brown voted for the draw.
Collins said, “I am not comfortable with the people that are running the hospital. I am not comfortable. I think they ran it in the ground, and if we continue to keep putting money over there, they are going to continue to spend it, and we’re not going to see no results from it. That’s my sentiment.”
He noted that other hospitals near Greenwood are operating without a similar supplement.
Abraham warned that the board majority was putting the hospital and the jobs of the nearly 570 people who still work there in immediate jeopardy.
“If you don’t give this money, you got to understand there is a good possibility they are going to give notice to shut down. If they give notice to shut down, it is not going to fall back on me because I am telling y’all, we cannot afford to lose the hospital,” Abraham said.
He said that cutting off the credit line at this point is not “a viable answer to our problem because you don’t want to shut the hospital down. Those employees lose their jobs.”
In response, Mitchell said, “At the end of this $10 million and critical access doesn’t come through and we don’t have no money, so what you going to tell them then?”
Among factors forcing a decision this week was the county’s Friday deadline for authorizing a 6.3% tax increase that, among other expenses, would go toward repaying the 20-year note on the line of credit. The first year’s payment is estimated at $910,0000, although that figure is based on the county borrowing the entire $10 million. The board voted by the same 3-2 majority Wednesday to approve the tax increase as part of the budget for the year beginning Oct. 1.
Marchand said Thursday that the hospital, even without the draw, will be able to make payroll at least through the end of the month.
In the memo to employees, he also said the hospital will keep them informed about the future of services “including emergency room, cancer, surgical, inpatient and other important services.”
The county authorized the first two draws totaling $4.2 million in July and August. The hospital was asking this month for just under $1,031,000.
The hospital has been waiting to learn from the Washington office of the Centers for Medicare & Medicaid Services (CMS) about whether it will overturn a regional decision not to accept the hospital’s application for a critical-access designation. Hospital officials have said the designation, which comes with increased Medicare reimbursements, would be sufficient to allow Greenwood Leflore’s continued operation.
Moore and Collins have voiced doubts that the designation will be forthcoming.
“In the history of CMS, once it gets turned down on the regional level, they have never did a (reversal). We have been turned down on the regional level,” Moore said.
On Thursday, Moore and Collins declined to provide their source of this information.
The regional CMS office rejected the application because the Greenwood hospital did not meet the requirement of being more than 35 miles away from another hospital. From the start, Greenwood hospital officials have said that they anticipated they would have to take their case all the way to Washington to get a waiver on that distance rule.
Moore also said the hospital “is suffering from mismanagement from the very top.” He then referred to Marchand’s comments during a board meeting Monday, which the supervisors had also wanted members of the Greenwood City Council to attend, but none of them showed. The hospital is jointly owned by the city and county.
“That guy stood in here and said, ‘I am doing this for y’alls community,’ not his community. On the weekend, he goes home ... he doesn’t have a vested interest here,” he said of Marchand, a veteran hospital administrator who came out of retirement in 2019 to serve as the Greenwood hospital’s interim CEO and commutes weekly from his home in Long Beach.
After Wednesday’s meeting, the supervisors said they could not answer a question about what might happen if the hospital again asked to draw money from the line of credit.
Greenwood Mayor Carolyn McAdams expressed frustration with the Board of Supervisors’ decision to deny the draw.
“It is so disappointing that the BOS have not honored their commitment to allow the hospital to draw money needed to keep GLH open until the decision has been reached by CMS,” she said in an email. “I am appalled that they are playing with not only lives but the livelihood of Greenwood/Leflore County.”
She also defended the hospital administration, saying “to make a statement that the board and administration of the GLH is mismanaging the hospital is absurd. We have hired three consultants and not one consultant has indicated that the hospital was being mismanaged. In fact, they have been praised for the decisions made during this ordeal.”
Marchand, in his memo to the hospital employees, tried to reassure them that the battle to keep the hospital in operation was not over.
“We defeated COVID, and now we are fighting unparalleled challenges both economically and politically,” he said. “While a few elected officials have lost confidence in you, we have not. We will continue our efforts to maintain essential health-care services for everyone.”
- Contact Susan Montgomery at 581-7241 or smontgomery@gwcommonwealth.com.
The original version of this story incorrectly reported that the vote was unanimous on the tax increase for the budget year beginning Oct. 1.
