Three Kansas hospitals are among six hospitals once run by a North Kansas City-based company that have filed for Chapter 11 bankruptcy protection.
Two of the three, Horton Community Hospital and Oswego Community Hospital, have closed in the last few weeks. The third, Hillsboro Community Hospital, remains open under the auspices of a court-ordered receivership.
A spokesman for Kansas Attorney General Derek Schmidt said last week that his office is conducting an ongoing investigation into Horton Community Hospital, but he declined to provide details.
All six bankrupt hospitals at one time were operated by EmpowerHMS, which bought up ailing rural hospitals in Kansas, Missouri and other states with the aim of turning them around. Empower until recently was based in North Kansas City, but its office on 1700 Swift Avenue appears to have been vacated.
The other three Empower-run hospitals that declared Chapter 11 bankruptcy Drumright Regional Hospital, Fairfax Community Hospital and Haskell County Community Hospital are in Oklahoma.
A seventh Empower hospital, Washington County Hospital in Plymouth, North Carolina, was the subject of an involuntary bankruptcy petition brought by three creditors last month.
Two other hospitals in Missouri once operated by Empower have also run into trouble.
I-70 Community Hospital in Sweet Springs, Missouri, a 15-bed facility, voluntarily shut down last month. The hospital said it planned to reopen, but federal regulators have cut off its participation in Medicare, typically a death knell for small hospitals.
And Fulton Medical Center in Fulton, Missouri, a 37-bed facility, was placed under new management more than a month ago after it missed payroll and defaulted on its bills.
Nearly all the hospitals in Empowers stable, more than a dozen in all, have encountered similar financial difficulties.
Hillsboro Community Hospital sought bankruptcy protection in Kansas last week. The other five hospitals filed their petitions in North Carolina on Sunday.
Its not clear why the petitions were filed in North Carolina. The North Carolina bankruptcy lawyer representing the hospitals did not return phone calls seeking comment.
Also unclear is whether the bankruptcy filings on behalf of the now-shuttered Horton and Oswego hospitals are intended to get them reopened or merely mechanisms for erasing their debts.
A Chapter 11 bankruptcy usually involves the reorganization of a companys business affairs by restructuring its debts and obligations. However, Chapter 11 can also be used as a vehicle to liquidate a company.
Kansas City bankruptcy lawyer Bruce Strauss, who represents Hillsboro Community Hospital, said he was retained by the hospitals receiver, Cohesive Healthcare Management + Consulting LLC, with the aim of keeping the hospital up and running.
