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Mena-based nonprofit Healthy Connections is in talks to acquire the troubled De Queen Medical Center hospital, De Queen and company officials say.

Mayor Jeff Brown read a statement Tuesday night at a De Queen City Council meeting briefly announcing negotiations for the sale of the hospital. Those deliberations are between the nonprofit and hospital owner Jorge Perez, the particulars of which are being reviewed by a Healthy Connections legal team, he said.

Brown described the parties as having reached an "agreement in principle."

However, in a written statement provided Wednesday to the Arkansas Democrat-Gazette, Healthy Connections business development specialist Jeffrey Slatton said the company "has had positive conversations concerning the De Queen Medical Center but at this point, there is not a signed agreement."

Slatton said he could not comment further.

In a phone interview Wednesday, Brown couldn't offer more specific information about any proposed terms for an acquisition, such as a purchase price, but he said Sevier County residents "deserve answers" about the hospital's future.

"We've been at a point where we didn't know if it would stay open. ... I think everybody's [feeling] a little bit of relief," he said about the negotiations.

The hospital is the only facility of its kind in the area and has been in difficulty for at least several months. Current and former employees have reported layoffs, late paychecks, and limited services and supplies.

Similar issues have cropped up at hospitals in Kansas, Tennessee, Oklahoma and Missouri that also were owned by parent company EmpowerHMS, which is led by Perez and recently was sold to a related organization called iHealthcare, according to reports.

It has been unclear for several weeks whether the group's only Arkansas facility would be able to continue operations.

On Feb. 11, electricity in several areas of the De Queen hospital was cut off for nonpayment on some accounts, a spokesman for Southwestern Electric Power Co. confirmed. Electrical service was restored after a payment was received.

The hospital has been on ambulance diversion for at least two weeks, Southwest EMS co-owner Sherri Hines said, meaning patients picked up in the area are taken to facilities in Mena, Nashville or Texarkana because of a lack of emergency room doctors working at De Queen Medical Center.

"I don't think the doors are completely shut, but we can't take anyone in there," she said.

The Arkansas Democrat-Gazette also found that EmpowerHMS owed almost $2 million in back taxes on real estate and property on its facilities in seven states, including in De Queen.

At the De Queen hospital, taxes were delinquent enough to put the facility at risk of being reported to the commissioner of state lands and ultimately being put up for auction.

Despite ongoing difficulties, city and Sevier County officials are adamant that keeping the hospital open is essential to the community. They point out that the next-nearest acute-care facilities are more than 30 miles away.

Several public and private meetings about saving the hospital took place at the end of 2018, and officials said Wednesday that talks regarding a buyer have been underway for several months.

Lisa Taylor, economic development director for Sevier County, said she was not ready to make a formal statement about the prospective sale, but she thought a deal could be reached soon.

"We can't share anything that's going on behind the scenes. ... There's so many things that can happen during the closing of a deal like this, I don't want to jinx it," she said.

Hospital administrators didn't respond to emailed requests for comment about a sale or the hospital's plans to maintain operations in the interim, and Perez didn't return a message left on his cellphone.

Healthy Connections was founded in 1998 and runs nine community clinics in Arkansas, including in Mena, Hot Springs, Arkadelphia, Mount Ida and De Queen. It doesn't currently operate an acute-care hospital.

As reported on financial statements for fiscal 2017 -- the most recent year for which documents were available -- Healthy Connections' funding comes primarily through charges for patient services, and grants administered by the U.S. Department of Health and Human Services and the Arkansas Department of Health.

The nonprofit reported more than $11 million in total unrestricted revenue, including grant funds, that year.

Recently, Brown said, Healthy Connections also purchased a building that once housed a nursing home in De Queen. The city issued a permit allowing the group to remodel that facility earlier this month.

Thus far in 2019, a few cities that had EmpowerHMS hospitals have sought legal remedies to wrest facilities from the organization's control.

A receiver was appointed for the company's hospital in Hillsboro, Kan., after a local bank filed for foreclosure on the facility, where utility bills once went unpaid for months, city administrator Larry Paine said in a previous interview. That foreclosure concerned a default on a construction loan totaling more than $9 million, according to the Hillsboro Free Press.

In Prague, Okla., city officials petitioned district and federal courts to place Prague Community Hospital in receivership after late paychecks in December "brought a lot of other things out in the open," city manager Jim Greff said.

Legal teams met unsuccessfully Monday to secure a settlement, Greff said. If the company does not transfer its Medicaid provider number to the local health authority by a March 11 hearing, a receiver could be appointed.

Receivership hearings also were held in January for the company's hospital in Ripley, Tenn. The county mayor didn't respond to an inquiry Wednesday about the result of those hearings.

Also, company-owned hospitals in Oswego, Kan., and Sweet Springs, Mo., ceased or suspended operations this month.

A list of hospitals it owned was recently removed from the EmpowerHMS website, which says the company specializes in "helping distressed and under performing hospitals."

A map showing the location of De Queen Regional Medical Center

State Desk on 02/21/2019

Print Headline: Firm looks at De Queen hospital

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