Subleases for clinics Somervell County Hospital District (dba Glen Rose Medical Center) is operating outside the district Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas

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Subleases for clinics Somervell County Hospital District (dba Glen Rose Medical Center) is operating outside the district

27 August 2019 at 8:46:52 PM

Why is Somervell County Hospital District dba Glen Rose Medical Center operating clinics in Texas outside of hospital district boundaries? 

The question also is: Why, since Somervell County Hospital District is a taxing district, was created for Somervell residents, where the boundaries are the county borders, is Glen Rose Medical Center opening up ANY clinics outside the boundaries of the district. The clinics ought to serve a *hospital purpose* which appears to me from AG opinion requires that they be for the needy and a public purpose, not to make money from for-profit to raise money for the hospital. The money that the hospital spent on 16 clinics through I-35 management included management fees, leases, bonuses based on performance, equipment (varying by clinic), insurance, and possibly employees. Because 13 of them have beeen cancelled in the last couple of months, the money spent to operate them is most likely unrecoverable. It's budget time so will be interesting to see what has been budgeted for I-35 management. (And don't forget Pecan, where Somervell County taxpayers pay to operate a clinic in another hospital district, Hood, in which residents there pay ZERO hospital district tax) 

As I said when I wrote about this in May 2019 (video at that link) 

There is another argument made about spending taxpayer money outside the district that says that if the clinic, wherever it is located, makes money which then comes back to fund the hospital, it's fine. That's regardless if the clinic already exists within another hospital district and without ensuring that a district has an intergovernmental agreement to operate in a different area outside the hospital district territory. Reminding as I talk about this that the easy way to resolve this would be for Somervelll County Hospital District to quit shying away from getting a legal opinion from the Texas Attorney General. Having an opinion would go a long way to shutting up those, including myself, who don't want our taxmoney being spent outside the district. 

As it happens now, the Somervell County Hospital District board simply turns a blind eye, did not, as you will see below, check to see if doing clinics all over the metroplex was a viable endeavor (besides the fact it looks illegal), discovered that Blue Cross would not pay for bills in, say, Allen, Texas (Collin County), and set a 35 mile limit for anything away from a hospital. I suspect Blue Cross Blue Shield has not closely looked at the additional factor when the hospital is actually part of a hospital district and whether the clinics serve a hospital purpose, including services for the needy.  

Update: Since originally writing this, and putting in some leases, I found that Somervell County Hospital District cancelled most of the clinics. (Took awhile to get the records because Somervell County Hospital District contested supplying them to the AG) In one case, it was that they weren't making the money they wanted and in the second it was money and a 35 mile limit. Nonetheless, they still operate 4 clinics outside the district, including one in another hospital district (Hood) 

At the May 30 2019 meeting Source One Plano and North Plano clinics were cancelled. 

Rough Transcript: 

Reynolds: Let me just broaden our discussion about I-35 involvement. Spent a lot of time looking at where we are with partnership. One of things that has allowed us to do this is the at the end of last month we were completely caught up with all our charge entries, so for month of April we were able to analyze by individual locations whether making money or not making money and if not, why we weren't, and how we were YTD. At the end of April, we were in the red $111,000 for all facilities including the pain center, but for the pain center itself, we made $330,000, had a very very good month on the pain center and the reason for that was we went to the I-35 and said let's look at the contracts we got and how the dollars are being spent, for management fee and particularly for what we call the quality bonus. Provision there at certain levels. We went back to them and Michael and Becky did a lot of financial work on this. It's not working at the current arrangement. Part of that is that our (?) is different in this market than it is here. So we did our original performance, we thought we'd have blue cross ... so we went back to them and said we have to take a look at this. Made significant adjustments in the bonus provision for the Addison pain center, which took us from a loss position to a profit. Dropped the bonus position by over 10 percent. Then we looked at our therapy side of it, therapy locations that are making money for us and those that are not. Already identified one location and already made a decision to cancel that contract. Two locations in Plano not making money with current financial arrangement. Talked with I-35 not making money, no longer going to do that, cancel contract. That will be 3 of the least productive contracts. McKinney, Fricso and Allen doing very well for us, Weatherford, Aledo. Real problem was when you look at the bonus structure we would be in a profit position until we pay the bonus. Went back again and said we gotta look at thi. If the hospital GRMC is not making money in that particular location, no bonus will be paid. Structure bonus position by location. Got those amendments. Asking for you to agree and ratify us to cancel the contracts on North Plano and Plano locations. Ron's been involved in all our discussion of I-35. I-35 has been very supportive in terms of an agreement that makes sense. In that market in the metroplex which means some of the insurance companies are not paying what we anticipated. We think after this month we will be in a very positive position, big picture with elimination of low performers and losing performer, big difference in structuring of bonus provisions. It's been the #1 items we've looked at in terms of improving our position. Went back to Kevin Reed making sure we are complaint with insurance providers. Now it's time for us to focus on fine tuning the operation. That's where we are. Should we continue or should we not. Continue with it but we take a much tougher look at it. 

Margaret: What happens if we terminate the contract

Reynolds: They go back to what they were

Pat: Try to renegotiate with them?
Reynolds: NO, issues with the contract. Only way we can renegotiate is to cancel the contract and come back later and see if they will renegotiate the management fee. 

Hankins: Main thning on these 2 locations was the payment. We went into this I-35 calculated that X number percent Blue Cross, X number percent United Health care. Some major employers in the area don't have BC, something else, so their contracts they were paying were not what was expected. Can't change that because you have to accept whatever insurance was being presented. 

Becky: Our reimbursement was pretty low.  Big difference. Theydidn't realize it and we didn't realize it. 

Hankins: Board ratified our notice of termination. Did that so we could get a termination letter to them before the end of month

Griffin made motion. Pat second, 

At least some of the clinics were apparently cancelled at the June 27 2019 meeting.

Rough Transcript

Reynolds: Renegotiating the contract. This is all about Blue Cross not paying us. WE've analyzed it, we've had a couple of full months, complete billing information so that we know where the billing issues are, we've come back and look at our payors and Blue Cross was the one that was not paying. Not receiving any payments but requesting medical records on all the claims, on the back end. As a result of that, they're out big payor, our overhead for all these therapies exceeding our costs, management fee, therapy employee fee, as a result of that we talked with I-35 asking you all to discontinue these contracts, we wanted a very short notice time just for this very issue. I-35 very receptive, they understand what the issue is. so our recommendation is that we have cancelled 7 all. Leave us with Cleburne, Aledo and Weatherford, these ones that we keep. One of the issues that's been raised is that for Medicare there's a 35 mile restriction on hospital based providers, no such restriction for therapy, all of these are outside the 35 mile range, Aledo, Weatherford and Cleburne within 35. Better opportunity to go back to BC and say we are only operating within 35 mile range and they are definitely in our service area. Now we want to talk seriously about you paying us for these. Part of our theory for keeping the 3. Other two within 35 mile radius. Give notice on July 1, effective August 1, will not longer have a partnerwhip with I-35 for these facilities. Revenues generated under their management and any cash collected split 50/50. Our best approach to go back to Blue Cross. Talked with Kevin Reed, HOPD within 35 miles, here's the documentation. Not paying for our therapy here right now, we're generating good revenue. 

Vasick- BC wants us to sign a different contract but I am not inclined while we have potential of renegotiating. I woulnd't be in any hurry to renegotite while we wait for court situation to work out.

Reynolds: One year contract 

Honea- Blue Cross has only negotiated about half the hospitals. Half still have a good contract. Unite. Makes us more valuable. Sign lucrative contact can go out and advertise to employees. 

Reynolds. Request to take action to issue termination letter ot these 6 entities. Issue on July 1, take effect August 1. 



That leaves, as per above, 3 clinics that are out of district. Actually 4 because they didn't include Pecan Family Medical Center, which operates in Hood County's hospital District. 


Here are the clinics Somervell County HOspital District originally contracted with, with the ones they have cancelled crossed out. I'm guessing that none of the money they spent on these clinics to date is refundable.

  • Cleburne, Johnson County, Texas - I-35 Capital Cleburne LP, Cleburne Family Medical Association -220A N Ridgeway Drive, Cleburne TX- Base Rent $12,500 per month, monthly rent adjusted on May 16, 2017 to $11,956 per month. PDF 

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