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story.lead_photo.caption FILE - A hallway in the De Queen Medical Center shows no sign of activity, with many doors shut tight and the cafeteria closed.

After months of problems at Sevier County's only hospital, a judge has appointed a temporary receiver to take control of De Queen Medical Center.

In an order issued Thursday morning, Sevier County Circuit Judge Tom Cooper appointed director of nursing Rachel Matheson as the receiver for the hospital, which is on West Collin Raye Drive in De Queen.

The order also temporarily bars hospital owners Jorge Perez and Ricardo Perez from spending or transferring the facility's assets.

"There is a real and present danger that the assets of [De Queen Medical Center] are being dissipated and not used for providing the [hospital's] essential medical services, including payment of employees and healthcare professionals," the order said.

"The continued dissipation of assets will jeopardize not only the ability of [De Queen Medical Center] to continue to operate as a licensed hospital but will also endanger the health and welfare of the citizens of Sevier County who are dependent on its services."

As receiver, Matheson will take over the hospital's bank accounts, licenses, and interactions with vendors and employees, among other responsibilities.

The order marks a turning point for De Queen Medical Center, which has been in distress since at least last fall and recently stopped seeing patients, including in its emergency room.

The hospital's problems appeared to be related to a financial collapse at Missouri-based parent company EmpowerHMS, which has health care facilities across several states -- almost all in rural areas.

Reports of unpaid wages, vendors, benefits and taxes associated with company-operated properties have proliferated. At least two hospitals have been placed in receivership, and some have closed.

"I closed 10 hospitals and it's been a nightmare," Jorge Perez wrote to an employee in a March 24 text message, a copy of which appeared in Sevier County court documents.

"I'm trying my best, all these hospitals drained me financially. Not until I close on a loan or someone buys the hospital I really don't know where I'm going to get money from."

Perez didn't immediately reply to a text message seeking comment or answer a call on his cellphone, and his voice mail box was full.

No one appeared at Thursday's hearing to represent the hospital's owners, according to Bruce Tidwell, an attorney who filed the lawsuit for the plaintiffs.

The order said that placing the hospital in receivership heads off the possible revocation of its license to operate. The Arkansas Department of Health could have terminated its license today unless the hospital was removed from its operators' control.

Recent inspection records provided by the Health Department refer to several violations, including drugs stored in a pharmacy without heat or air conditioning, bugs that appeared to be cockroaches in the cafeteria, rusty bed frames and X-ray equipment, and an emergency department that wasn't staffed with a physician or other high-level provider on a 24-hour basis.

A lawsuit requesting the receiver appointment, along with a request for an expedited hearing, was filed in Arkansas circuit court Monday.

The filing named Sevier County and three current and former hospital employees as plaintiffs, including Lisa Moser, who recently worked as the hospital's human resources director.

A complaint described insolvency at the hospital, alleging more than $120,000 in unpaid county property taxes, over $14,000 in unpaid wages to three affiliates and an anticipated $800,000 incoming payment from the Centers for Medicare and Medicaid Services, which the plaintiffs were "concerned may be misappropriated."

Former employee Ashley Knittig alleged in the suit that the hospital owed her $67,058.61 in medical claims related to insurance premiums she said hadn't been paid by the company.

The same claim -- that insurance premiums went unpaid on employees' behalf, though deductions were being withheld -- appeared in Arkansas Department of Labor records detailing an investigation of the facility.

In January, the state agency handed its investigation off to federal labor regulators, who don't comment on those activities.

Throughout the hospital's difficulties, De Queen and Sevier County officials have repeatedly said their first priority was making sure the facility didn't close down. Once among the county's larger employers, it is more than 30 miles from any similar health care provider and provides critical stabilization services in the rural area.

But its fate grew increasingly uncertain as, over several months, employees reported late payrolls, layoffs and complaints from vendors of unpaid bills for essential services.

That included a February electricity shutoff in some parts of the hospital after some of its utility accounts fell into delinquent status.

When, that same month, De Queen Mayor Jeff Brown announced at a public meeting that Arkansas nonprofit Healthy Connections was in negotiations to buy the medical center, it looked as though the hospital's fortunes were turning.

But the hospital's ownership never responded to an offer, a Healthy Connections spokesman said Thursday.

"We believe the hospital is critical to DeQueen and the surrounding communities and support every effort to maintain the viability of the hospital," Jeffrey Slatton said in a statement. "Healthy Connections is prepared to assist in any way that we can."

Dr. Jason Lofton, a De Queen doctor who saw patients at the hospital and has been active in community efforts to preserve it, said Thursday's appointment was a welcome development.

"I'm excited. I think it's a first step in a needed direction. ... Something needed to happen," he said

He added that some employees who had remained with the hospital in hopes of keeping its doors open haven't been paid in roughly two months.

While he didn't yet know what would happen with the hospital's operations, he said area officials would work together to explore solutions. That could include partnering with a hospital system, seeing if any state assistance funds are available or pushing for a local tax to help finance the facility.

Community officials will begin meeting over the next week to discuss the best approach, rural development authority head and University of Arkansas Cossatot Community College Chancellor Steve Cole said.

In a text message, Sevier County economic development director Lisa Taylor wrote that "local leadership is willing to do whatever is necessary and within their power to ensure the safety of [county] residents."

A hearing to decide whether to continue the receivership is scheduled for April 19.

State Desk on 03/29/2019

Print Headline: Judge puts temporary receiver over Arkansas hospital's bank accounts, other matters

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