Power struggle: Putnam hospital tries to oust Perez & co.

The Putnam County Memorial Hospital board and companies tied to Jorge Perez are in a dispute over who is in charge of the facility (Photo: KTVO file)

The Putnam County Memorial Hospital board is attempting to oust the controversial company that funneled more than $100 million through the facility last year.

Joe Bednar, an attorney with Spencer Fane in Jefferson City representing the hospital, told KTVO Wednesday that the management agreement between Putnam County hospital and Hospital Partners, Inc., had expired on February 28 because a change of ownership had never been approved by the state. The hospital was the focus of a scathing audit report last August by State Auditor Nicole Galloway’s office, in particular the lab billing practices introduced by Hospital Partners co-owners Jorge Perez and David Byrns.

But Mike Murtha, responding to an inquiry sent to Perez, said “that would be news to us.”

Murtha is the president of the National Alliance of Rural Hospitals. Financial documents obtained by KTVO show that Putnam County hospital paid out more than $100 million to lab companies associated with the Alliance between November 2016 and September 2017.

Perez serves as chairman of the organization.

Both sides claimed to KTVO to currently be in control of hospital operations, and both expressed full support for CEO Gayle Pickens. But the agreement over who runs the day-to-day operations ends there.

“If [EmpowerHMS] wanted to get out of there, they’d just say ‘we’re gone,’” Murtha said, referencing another of Perez’s companies. “But they aren’t. They’re still there because they believe in that hospital.”

Bednar said as far as the hospital board is concerned, its association with Perez’s companies -- which include Hospital Partners, Hospital Lab Partners and EmpowerHMS -- is over because the change of ownership had never been approved by the state as stipulated in the management agreement.

Murtha said the application “may have been held up,” but had been submitted.

Last year’s audit report noted that despite assurances from Byrns, who was CEO at the time, the Missouri Department of Health and Senior Services reported it had never received an application for a change of ownership.

The next step, Bednar said, is hiring a new management team. Despite the power struggle over who controls hospital operations, the board has begun preliminary work on preparing a request for proposal for potential candidates. As part of that process, Bednar said the hospital will bring in an outside accounting firm to take a second look at the facility’s finances.

Murtha disputed the board’s ability to do so without involvement from EmpowerHMS.

Perez’s companies have faced increased scrutiny since Galloway’s audit last year, and the purchase of Fulton Medical Center by Kansas City-based EmpowerHMS.

Galloway’s office has since returned for a follow-up audit. Bednar told KTVO it was his understanding that at least some of the practices questioned by the state audit last year have been changed. But he said that the outside accounting firm’s work would shed more light on the facility’s finances.

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