Hospital district schedules special session as corporation 'contemplates' bankruptcy

Item File PhotoThe Walker County Hospital District is expected to take over operations at Huntsville Memorial Hospital, in a partnership with Community Hospital Corporation.

A bankruptcy filing for Walker County Hospital Corporation could be imminent. 

And it could be coming in conjunction with a taxpayer takeover of the 95-bed Huntsville Memorial Hospital. 

With a Nov. 1 deadline looming, the publicly-funded Walker County Hospital District is expected to go behind closed doors on Thursday to meet with legal counsel in respect to a “contemplated Chapter 11 Bankruptcy filing.” Hospital district officials said that the private hospital corporation board, who currently oversees operations, made the decision to proceed in a closed-door meeting last Thursday.

The official filing could come as early as this week, ending years of struggles that included millions in taxpayer bailouts.

However, the effect is expected to be minimal on HMH employees as the Walker County Hospital District is nearly finished with an operating agreement with Community Hospital Corporation, a Plano-based health care provider. A closed-session meeting has been scheduled for Thursday at noon in the district’s office.

A letter of intent between the hospital district and CHC will expire the following day.

How did we get here?

The Walker County Hospital Corporation — the non-profit organization responsible for the operation of Huntsville Memorial Hospital — lost millions due to inflated salaries, alleged insurance fraud and failing attempts to establish a network of clinics. This was confirmed by officials with the corporation and the Walker County Hospital District by The Item earlier this year.

The shortfall placed a heavier burden on taxpayers, with the public taxing entity providing over $6 million in forgiven rent payments and cash infusions to keep the doors open.

What’s the future of HMH?

The hospital district and CHC will form a new joint-venture nonprofit. The taxing entity will fund the enterprise and hold the veto power for all “big picture” decisions involving the operations of the hospital.

According to preliminary estimates, the non-profit will need $20-$30 million to fund operations for at least the first three months until new contracts are negotiated with insurance providers. The hospital district currently has approximately $13 million in reserves.

The deal is expected to be discussed and possibly finalized during Thursday’s meeting, which will be held in the district office in room 515 of the First National Bank Building, 1300 11th Street in Huntsville.