Rumors spread quickly in a small town. Heumann’s wife, Kim, first heard the bad news in the car when a friend who also received the letter texted her.
“Your dismissal was unforeseen” said letterdated September 8 and signed by Platinum Health Systems, adding that the shooting was permanent “non-recourse” and that “the medical facility will be closed.”
“I don’t know what my next steps are,” said Heumann, 52, who ran a laboratory at Audren Hospital.
The future of the Humans, hundreds of other workers, and thousands of patients in two small Missouri towns began to unravel long before that day. The drama played out in Paul Heumann’s hometown is familiar to many in rural America: locals are so desperate to keep their hospital open that they’re willing to risk any buyer, including those funded by private equity.
Sometimes they lose.
Noble Health, a three-year-old private equity-backed startup, acquired Audrain and nearby Callaway Community Hospital during the pandemic. In March, he suspended all hospital services and then fired 181 employees. government records show.
Noble, facing staggering debts, more than a dozen lawsuits and at least two federal investigations, closed a deal in April to sell the hospitals to Platinum Neighbors, which is linked to the Texas-based company. Platinum Team Management and Platinum Health Systems. At the end of June Platinum asked Missouri is extending the September 21 deadline for opening hospitals. On Tuesday, Platinum officials told KHN that “on Noble’s behalf” they have asked Missouri regulators for an additional 30-day extension “in an attempt to explore all alternatives to reopen these facilities,” said Ryann Gordon, Platinum’s director of marketing. . “Payroll arrears and employee health benefits are paramount.”
A few hours before the licensing deadline Wednesday, Platinum has applied for the 90 day variance. Missouri regulations do not allow another renewal within a year, said Lisa Cox, spokeswoman for the Missouri Department of Health and Senior Services. So the state “worked with them” and granted the request, she said.
Platinum said hospitals need time to complete construction projects. Windows are shattered in Odren’s “ER area” and Callaway Hospital needs “critical plumbing repairs,” according to the state’s letter of approval. Hospitals can change ownership within 90 days, Cox said.
Corey Countryman, president of Platinum Health Systems, confirmed the layoffs of the remaining hospital staff. “We are working with several partners to reopen hospitals,” he said.
It may be related to the new owner. One potential customer is Owen Schuler, a Georgia-based entrepreneur who said he’s thinking about buying them. Schuler, who was contacted by phone after visiting rural communities, said: “I like what I see.”
“What happened is heartbreaking,” said Shuler, whose companies include Bankers Realty Co. as well as Shuler Capital Corp. If he buys hospitals, he says he will do so as managing director of his new venture, CareONE Global. “In terms of due diligence, I don’t like what I see and learn,” he said. From his review, he concluded that “private and venture capital should be kept away from healthcare.”
On his LinkedIn profile, Schuler said that “brings a lifetime perspective from a family-run skilled care business”, as well as experience in the field of “telemedicine and medical services”.
Schuler, who confirmed that hospitals are saddled with significant debt — “roughly” between $45 million and $50 million — said: “I’m not ready to talk openly about business strategy yet.” He said his approach would be “holistic” and would include telemedicine. Many industry leaders argue that telemedicine is a way to bring high-quality healthcare to rural communities that cannot afford and need a full on-site platoon of specialists.
“Our goal is to acquire hospitals in rural and disadvantaged areas and bring our capabilities into them,” Schuler said, adding that fixing two “mostly non-functioning” hospitals in Missouri from the bottom up will be “much easier than trying to enter a healthy system.” . “.
However, it’s not clear if Schuler or another buyer will succeed, and what it will take to reopen them after years of insecure ownership and financial troubles.
Venture capital and private equity firm Nueterra Capital launched Noble in December 2019 with executives who never ran the hospital, including Donald R. Peterson, a co-founder who was accused of Medicare fraud before joining Noble. Peterson settled this matter pleading not guilty and in August 2019 agreed to be excluded for five years from Medicare, Medicaid and all other federal health programs, according to the Office of Health and Human Services Inspector General.
Federal regulators did not block the acquisition, which involved Peterson. “All ownership and management information is self-reported,” said Kristen Clemens, spokesperson for the Centers for Medicare and Medicaid Services.
Under the leadership of Noble Health, the problems did not take long. Noble accepted nearly $20 million in federal COVID-19 relief funds, including $4.8 million from paycheck protection programs, according to public records.
However, doctors, nurses and patients saw evidence that the new owners were cutting back on services by not paying for or storing surgical supplies and medicines. In Callaway, government inspectors found that hospital conditions dangerous patients. Former employees provided KHN with invoices and pay stubs, which they said showed Noble had also stopped paying employees for medical, dental, vision and insurance benefits.
After employees filed complaints about unexpected medical bills, the Labor Department’s Employee Benefits Administration launched an investigation in early March. email sent to company and received KHN. The department confirmed a second investigation by its other division, Wage and Hour, into Noble’s management of its Audrain hospital and clinic.
In April, Noble closed a deal to sell both hospitals for $2 and transfer the shares to Platinum, which assumed all liabilities. in accordance with the agreement. In a letter dated June 22 Platinum told state regulators about hospital operating licenses, “We are asking for an extension as Noble Health shares have been transferred to Platinum Medical Management.”
While visiting hospitals in April, Countryman told employees the “priority” was to pay back wages Noble owed them.
According to the staff, neither Noble nor Platinum could handle it in the following months. In addition to federal investigations, nine wage lawsuits — the largest at $355,000 — were filed against Noble in Kansas. provided data through a Kansas Public Records Act request.
By early August, others acknowledged employee complaints. The director who provided dental and ophthalmic care, sent letters workers, saying it would not require any worker to pay benefits covered by the insurer after Noble stopped sending insurance premiums to cover employees. “This situation is not typical,” chief spokesperson Ashley Miller wrote in an email.
Heumann, as head of the laboratory, was among the workers who were not fired in the spring. They came to work every day hoping that the Audrain hospital would reopen. Heumann tested the reagents and kept the machines running even when money for consumables was short.
“We couldn’t get anything,” Heumann said, “so we lived with what we had.”
Heumann, who provided KHN with pay stubs, said he received a paycheck from Noble at the end of March. He said he did not receive another paycheck until the end of May. He regularly received a salary in June and early July. But his second July check under Platinum was a week late. His last paycheck arrived on August 8 and was also late.
His last seven checks came from three companies. They were all under Platinum’s care, first with Platinum Neighbors, then Callaway County Community Hospital, and finally Noble Health Audrain Inc.
“Everyone cashed their checks as soon as they got them,” Huemann said. “So many red flags. But you know, we are at their mercy, we have no control, and we are still grateful that they are saving us.”
Check receipts also show that hospital operators deducted a total of $1,385 from Humann’s insurance payment. The health insurance was supposed to be from Blue Cross and Blue Shield of Texas, but Heumann said he never got the card and couldn’t verify coverage.
“I called four or five times on different days,” he said. “They could never find me, no matter how they looked for me, not in the social security system, not by date of birth, or anywhere else.”
Countryman handled all financial matters with Platinum’s corporate offices. Ryan Cole, chief executive of the Platinum Team, did not directly return calls and emails asking for comment.
Some doctors left the city as riots engulfed the hospitals.
Others, such as family medicine physician Diane Jacobi and her nurse practitioner Regina Hill, have joined MU Health Care, affiliated with the University of Missouri, in Mexico, Missouri, a city of 11,000 that is home to the Audren Community Hospital.
Jacobi said her patients need local help. “I don’t know if you are a mother, but if you are in labor, the thought of having to spend 45 minutes in a car on the way to the hospital gets on your nerves,” she said. “Safer if you have care.”
Lou Leonatti, a lawyer who lives in Mexico, said he feels so strongly about the community’s need for a hospital and emergency care that he provided loans to Noble last year so the company could meet its payroll. Leonatti’s personal loan of $60,000 with an interest rate of around 3% was due in January but has not yet been paid, he said.
Leonatti helped found Project Sunrise, a local economic development group. If a new agreement is not reached, he said, “we would like to have a plan B in place.”
peterson, who helped launch Noble’s failed attempt to rebuild two hospitals in Missouri appears to have found his Plan B in Dubai. “I sit in the Emirates Air Lounge in Dubai and marvel at the experience I was given at the tender age of 68.” he wrote on LinkedIn. “I will be in Riyadh next week to complete due diligence on starting a new business there.”
The post infuriated Tonya Lintakum, a nurse practitioner who has worked at the Odren Cancer Screening Center for more than two decades. She said that he “destroyed the lives and livelihoods of many people”, adding that “for someone to deceive you like that” and “carried on without consequences. The world just isn’t what it should be.”
Peterson declined to comment.
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