Monday, August 24, 2009

Attorney General Steve Six today filed a lawsuit against a not-for-profit hospital corporation St. Joseph Memorial Hospital, Inc., its individual directors and Central Kansas Medical Center (CKMC) its corporate parent. The lawsuit alleges that the current hospital owners are abandoning a valuable charitable asset.

“St. Joseph Memorial Hospital is very important to the Larned community,” Six said. “It is the only hospital in Pawnee County to get quality health care services.”

For financial reasons, on June 10, 2009, St. Joseph’s board decided to close the hospital. The hospital is designated as a Critical Access Hospital (CAH) for Medicare patients. That means Medicare reimburses the hospital at its actual cost of delivering services instead of a pre-determined fee schedule which is much lower than actual cost. CAH designations are quite valuable. The total annual value to Larned hospital is estimated to be currently at least $1.1 million.

Since the June announcement, community leaders in Larned and Pawnee County have been trying to find a way to keep the hospital open. They’ve partnered with Hays Medical, a Kansas non-profit corporation. Hays Medical runs the most CAHs in the state and is of the opinion that St. Joseph Memorial Hospital in Larned can be financially viable.

The lawsuit alleges that it is not economically possible to operate a hospital in Pawnee County without the Critical Access Hospital designation. But rather than give or sell the CAH designation to allow the hospital’s continuing operation by a new entity, St. Joseph is simply letting it lapse-- wasting a valuable charitable asset and charitable funds. The lawsuit seeks a temporary restraining order preventing the defendants from taking any action that would result in the lapse of the CAH designation.

Monday afternoon, the Court granted the Attorney General’s request for the TRO and set the matter for trial on September 22-23, 2009.