The entirety of the meeting can be viewed below the photographs after this article.
Under the lease agreement, Pafford’s obligation to fund repair and replacement expenses in the hospital is capped at $200,000 per year. After that, Pafford can request that the city of Hope and the county of Hempstead pay each 1/3rd of the cost of these expenses while Pafford would pay 1/3rd as well, should the need of those expenses be mutually agreed upon by the three parties.
It emerged during discussion, in which representatives from Pafford, including Vice President Ben Gresham of Pafford Medical Services and Chief Executive Officer of Mississippi and Louisiana Operations Greg Pafford participated, that the $200,000 per year cap was a sticking point in negotiations. Vice-mayor Kiffinea Talley spoke of her concerns with this, but in the end voted with the other Hope board members to give unanimous approval for Mayor Don Still to sign the agreements.
The resolution approved by the board also authorizes a separate deal called the “Agreement for the Provision of Stabilizing Hospital Services and Option to Purchase Hospital Assets in Favor of City of Hope and Hempstead County,” the city of Hope, the county of Hempstead and Pafford will also pay $400,000 each to the hospital’s management group in order to ensure the hospital can operate in the period of time between the Pafford’s assumption of the operating license 53 days ago and its ability to receive Medicare and Medicaid payments as well as state funding, two issues most believe will be resolved within the next ten months.
After that initial payment, to be made later this week, the city and the county will each pay the managing group $100,000 per month for ten months with the first payment due by December 15th. The payments will be made until the total investment by the city and the county amounts to $2 million, divided evenly so that the city pays $1 million and the county pays $1 million.
Invoices will be provided to the city and to the county on the fifth day of each month along with a profit and loss statement for the preceding month.
The lease is a product of about six months of negotiations between representatives of the Pafford Medical System and representatives of both the city of Hope and the county of Hempstead.
Discussion during the meeting hinged on what happens if the effort by Pafford to operate the hospital fails, that is if funding runs out before Pafford begins to receive sufficient payment for services and/or sufficient funding is not allocated by the state of Arkansas to support the hospital. It also included consideration of the risks, with the city putting up $1 million of taxpayer funds it could conceivably lose if funds are not forthcoming.
City Director Mark Ross said after the vote that the lack of a hospital in Hope might mean the exit of many of the industrial facilities providing jobs to Hope and other area residents. Throughout the meeting, various speakers made clear that before state aid could be provided, a lease agreement between Pafford and the city and county needed to be finalized.
After the meeting adjourned, Ben Gresham was asked why Pafford Medical Systems is not yet receiving Medicare and Medicaid payments for medical services it has been providing since it took over the hospital from management and ownership by Steward Health. “Right now we don't have all the licenses and numbers that we need to be able to bill Medicare, Medicaid and other insurance companies … Steward hasn't given us all the access to the numbers that we need to be able to do some of the insurance stuff, and some of the process just takes time,” he said. Pafford is receiving cash payments, he acknowledged, but these are only a small proportion of the cost of providing medical services.
Ben Gresham said that during bankruptcy proceedings in the federal court of Judge Christopher Lopez, “there was a directive to begin with for them [Steward] to do that [transfer the authorization to take Medicare, Medicaid and other insurances]. The directive was that they were going to do things a certain way, and they didn’t get done that certain way. We're looking into it, but those processes work very slowly."
An emergency meeting of the Hempstead County Quorum Court has been announced to take place at the Courthouse at 4:30 p.m. tomorrow, presumably to discuss the lease agreement and the agreement to provide stabilization funds. [Edit: That meeting has been postponed to Thursday at 4:00 p.m.]
In May of 2024, city and county officials were made aware of the decision by the ownership of the operating license of Hope’s only hospital, Steward Healthcare, to file for Chapter 11 bankruptcy in the Southern District of Texas. Soon after, a nonprofit the Southwest Arkansas Health Authority (SWAHA) was incorporated, including members of city and county government, Pafford executives, and Hempstead County Economic Development Corporation to assure the hospital in Hope remained open. Hope and Hempstead County pledged a total of $2 million to the effort, which did not end up having to be used. The prior owner of the real estate in which Hope’s hospital operated agreed after meeting with members of SWAHA to provide the property to the county and city for no cost.
Pafford Medical Center emerged as the qualified bidder in bankruptcy proceedings to assume the license to operate the hospital from Steward Healthcare. A court ruling in September awarded the license to Pafford and that company has taken over the running of the 48-bed facility since, changing the signs to reflect its new name, Southwest Arkansas Regional Hospital.
