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Details emerge of proposed "Request for Proposals" to lease the Greenwood Leflore Hospital

Wednesday, July 20, 2022, 5:01 pm News Flash Archive

At yesterday's meeting of the Greenwood City Council, the council voted unanimously to approve publishing a Request for Proposals (RFPs) from interested medical institutions for the lease of the Greenwood Leflore Hospital.

An examination of the RFP documents discloses several interesting facts about the realities of leasing the hospital to another entity, and no longer running its operations with a local board and administration. At the same time, some of the conditions provided for in the RFP raise questions as to whether a qualified bid will even be received.

The resolution and RPF specifications may be seen here: Resolution to Publish Request for Bids to lease Greenwood Leflore Hospital

The hospital board of trustees had recommended, at its Monday meeting, that this search for someone to lease and operate the hospital be approved by the hospital's owners (Greenwood and Leflore County).

GLH is now in desperate financial straits, due to declining revenue and escalating costs, most of which are related to the COVID pandemic. See our most recent reporting here: GLH losses for June total $1.65 million; total usable cash now down to $3.69 million

Under Mississippi state law, only the owners can solicit and accept bids to lease a community hospital such as GLH. If a lease is approved, the local hospital board loses control of the day to day operations of the hospital, which become the duty of the new leasing entity.

Next Monday, the Leflore County Board of Supervisors is expected to take up for approval the same request from the hospital board. If the county approves, then the RFPs will be published and the secret bids collected by the Jackson law firm of Wise Carter.

Some interesting facts emerge from the RFP proposal:

  1. Sealed bids are due at 3 pm August 31.
  2. The city and county will negotiate with bidders, and decide which bid to accept by September 30.
  3. The city and county can accept the highest and best bid, or reject them all.
  4. Closing on the lease agreement will take place on or before October 31.
  5. Bidders must have at least 10 years' experience in running licensed hospitals.
  6. Bidders must have a clean criminal background, so that they will not be disqualified from participating in federal and state programs like Medicare and Medicaid.
  7. Bidders must have never been disqualified from Medicare, Medicaid, or any other federal healthcare program.
  8. Bidders must certify that there will be no discrimination based on financial or physical status, or other standard bases, in access to medical care, or in the appointment of doctors to the medical staff.
  9. Bidders must certify that current levels of service will be maintained in charity care, general acute care beds, rehabilitation, surgery, and emergency room services.
  10. Bidders will have to provide their own liability coverage, as the hospital owners will no longer be paying any premiums for coverage.
  11. Bidders must ensure that all Leflore County residents will have access to hospital services without regard to insurance status, and without discrimination otherwise.
  12. Bidders must maintain property and liability insurance equivalent to that currently held by the hospital.
  13. Bidders must specify the length of the lease, between 20 and 50 years.
  14. Bidders must specify the amount of rent they are proposing to pay for the lease, based upon land value, licensed beds, services, and facilities.
  15. Bidders are expected to buy or lease the tangible assets owned by the hospital.
  16. Bidders must address whether or not they will assume the current liabilities of the hospital.
  17. Bidders must state whether they will assume the hospital's existing debts including the hospital's unfunded pension liability, which at present stands at $13.1 million. In addition, the hospital owes CMS $8.2 million.
  18. Bidders must indemnify the city, county, and all city and county officials, agents, and employees, for any claims of liability resulting from the operation of the leased hospital.
  19. Bidders must guarantee continued employment for at least 12 months for all current hospital employees who are not under contract, at equivalent or better terms that they currently work under. Bidders must provide a comparison between the hospital's current benefit plan, vs. the bidders' benefit plan.
  20. Bidders must accept that the properties and assets are leased on an "as-is" basis, with no implied warranty as to value, quality, or suitability for use.
  21. Environmental studies of the leased facilities at beginning and end of lease should be obtained.
  22. Bidders must specify whether they intend to operate the leased hospital on a for-profit or non-profit basis.
  23. Once the lease is operative, the hospital board of trustees will, essentially, dissolve.
  24. Bidders will be allowed to inspect current secret hospital contracts after signing a proprietary information agreement, and must specify in their bids which contracts they intend to continue, and which they intend to abrogate.
  25. Bidders must provide descriptions of their plans to expand services, recruit specialists, and make capital improvements at the leased hospital.

Mr. Gary Marchand, who is helping run GLH after the abrupt resignation of CEO Jason Studley last Friday, presented an overview to the city council of the desperate situation the hospital finds itself in today. He blamed the heavy costs associated with COVID, coupled with a sharp downturn in patients, and the exhaustion of federal and state COVID grants. Because of these factors, the hospital has had to spend cash balances to fund day to day operations, with the cash now having dwindled to less than two weeks' worth of operating costs.

Video of Tuesday's city council meeting may be seen here: Greenwood City Council Meeting, July 19, 2022

To review our reporting on GLH and its financial woes, please see here: Index of Greenwood Leflore Hospital news articles

John Pittman Hey
The Taxpayers Channel

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