June 7, 2007

Hospital appeals MCAD action taking away tax-exempt status

Directors hear progress report on expansion of ER, 24-hour clinic

  Citing its acquisition by a for-profit entity last fall, the Milam County Appraisal District (MCAD) has lifted Richards Memorial Hospital’s tax-exempt status.

  But the Rockdale Hospital District (RHD) board’s president is optimistic an appeal will be successful.

  Dr. John M. Weed III delivered a report on that issue to the board Monday during a forward-looking session that included discussion of a 7,800-square-foot addition to RMH that will provide a new 24-hour clinic and emergency room.

 Dr. Weed also told board members he had recently appeared in federal district court as the hospital attempts to recover damages from a company he said “never delivered” on a lease agreement to provide a CT-scan.

Appeal

  The MCAD notified the hospital district RMH no longer qualifies as tax exempt after it formally entered into a business relationship with for-profit Blackhawk Health Care on Nov. 1, 2006, creating the new entity, Little River Healthcare.

 But Dr. Weed, who has been meeting with MCAD officials, said he is now “much more optimistic” the district will get a positive outcome as the result of its ongoing appeal.

 “We’ve got case law, we’ve got an attorney general’s opinion to back up our stand,” Dr. Weed said.

  “RMH continues its exact same purpose as before (the merger),” he said. “We continue to provide indigent care.”

 Dr. Weed said he expects the MCAD to rule on the appeal within the next 30 to 60 days.

Expansion

  Scott Tomhave, Blackhawk vice-president for construction, told board members the modular components for RMH’s 7,800-square-foot expansion are expected to arrive within the next two weeks.

 The modules will be phased in over upcoming months and years with the part housing a new CT-scan targeted for completion in late summer, according to Jeff Madison, Little River CEO.

 Other modules will house a new, expanded 24-hour clinic and a new emergency room, he said.

  Site preparation is well under way and Tomhave said additional concrete was required for the section which will contain the CT-scan’s 82,000-pound magnet.

  Madison said the biggest expansion question of all, whether to build a new main hospital building or renovate the current structure from 1973, has not yet been answered.

 “We’re still deciding on that one,” he said. “We have basically decided to remain on our current property because there just aren’t any new sites out there which meet our needs.”

Litigation

  Dr. Weed said the district has appeared in Waco federal district court to recover damages from the Mecs Company.

  “A couple of years ago we were supposed to be leasing a CT-scanner from them, paid them an initial $35,000 and it never showed up,” he said.

  “Mecs did not send a representative to the federal district court hearing either,” Dr. Weed said.

  He said the district is also seeking lost-profit damages and pointed out, that even though a liability cap is in effect, the district could obtain between $75,000 and $100,000 through the litigation.

  “I simply can’t imagine this not being ruled in our favor,” he said.

 In other business, board members:

  •  Learned recently retired longtime elementary counselor Malda Burns will begin work as public relations coordinator for RMH in August.

  •  Renewed its contract with IMH Consulting and Support.