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Questions surround hospital, clinic closures despite influx of federal stimulus money

Community Health Network received $218 million, records show
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Posted at 6:00 AM, Jul 01, 2020
and last updated 2020-07-01 10:10:20-04

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HOWARD CO. — Hundreds of employees and patients are left in limbo as Community Health Network announced it will close two Kokomo facilities — an outpatient rehab clinic and specialty hospital.

On August 30, Community Howard Specialty Hospital and Replay Physical Therapy will shut down.

That will result in the layoffs of 121 people between the two Kokomo facilities—85 workers at the hospital, and 36 employees at Replay.

Community Health Network said they made the decision after an evaluation of the community's needs and because of the changing landscape of healthcare.

Call 6 Investigates uncovered the layoffs and closures are happening despite the healthcare system receiving $218 million in federal stimulus money.

The decision to close comes as a shock to patients and their families, like William Hartman and his 16-month old daughter Kensley.

"We were surprised," said Hartman. "Where did this come from? Out of nowhere."

Kensley is getting help with standing and walking at Replay Physical Therapy, an outpatient rehab clinic that's been in Kokomo for 30 years.

"She's come a long way," said Hartman. "It doesn't make a lot of sense why they're closing. Replay is always busy."

Julie Howard has used Replay Physical Therapy for years for shoulder, back, and neck problems.

"I'm shocked, angry, confused, a lot of different emotions," said Howard. "Why is this facility going to close? It's busy."

Both Howard and Hartman said COVID-19 prompted Replay to only be open on Mondays and Fridays in April, May and part of June.

"They were only open two days a week, and we had to wear a mask," said Howard.

Community Health Network's announcement on the closure does not mention COVID-19.

"After a thorough evaluation of the needs of this community, the changing landscape of healthcare and how to best align Community Howard Regional Health's services to sustainably meet those needs both now and in the future, a decision has been reached to end operations at Community Howard Specialty Hospital and Replay Physical Therapy," read the statement to RTV6. "In line with this decision, Community Howard Specialty Hospital, which is home to an inpatient rehab facility, outpatient therapy services and a sleep study lab, will close its Dixon Road campus effective August 30. Replay Physical Therapy, which operates under the license of Community Howard Specialty Hospital, will also be closing."

The closures come as the CARES Act and other federal programs provided $175 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response.

Call 6 Investigates did some checking and found Community Health Network received $85 million in federal grants and $133 million in federal loans—totaling $218 in federal stimulus money.

"That just doesn't seem right," said Howard. "It's very frustrating."

Good Jobs First, a national policy resource center that tracks CARES Act data, lists Community Health Network as one of the highest recipients of Indiana-based companies.

The numbers aren't sitting well with employees and patients impacted by the closure.

"I thought the federal stimulus money was to prevent employee loss," said Hartman.

Community Health Network has not responded to RTV6's questions about how they spent the federal stimulus money.

"The CARES Act funds can only be used for COVID-specific needs," said Kris Kirschner, director of corporate communications at Community Health Network. "The (Department of Health and Human Services) has strict guidelines in that regard. The

Replay, and Specialty Hospital decision was based on a thorough evaluation of the needs of the community, the changing landscape of healthcare, and how to best align Community Howard Regional Health's services to sustainably meet those needs both now and in the future."

Call 6 Investigates checked with the U.S. Department of Health and Human Services, as well as the terms and conditions of the federal stimulus funds, and learned healthcare providers could also use the money to cover lost revenue attributable to coronavirus.

"This may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care," according to the HHS website. "Thus, these costs do not need to be specific to providing care for possible or actual coronavirus patients, but the lost revenue that the Provider Relief Fund payment covers must have been lost due to coronavirus."

The FAQ also says HHS encourages the use of funds to cover lost revenue so that providers can "respond to the coronavirus public health emergency by maintaining healthcare delivery capacity", such as using relief fund payments to cover:

  • Employee or contractor payroll
  • Employee health insurance
  • Rent or mortgage payments
  • Equipment lease payments
  • Electronic health record licensing fees

We asked healthcare expert and law professor Seema Mohapatra at the IU McKinney School of Law to review the federal guidelines as well, and she agreed healthcare systems have some leeway in how to spend the funds.

"This money was really supposed to support the industry at a time of emergency," said Mohapatra. "It can be used for healthcare expenses that are attributable to coronavirus. That includes any kind of lost revenue that is related to COVID. So that could be the fact that you're not seeing as many patients, that you're not able to do elective procedures, or that you're not able to have outpatient procedures."

Mohapatra said healthcare systems look at a variety of factors when deciding whether to close a facility.

"It could just be a strategy of the system and what they've decided to do, and as a private entity, they can do that," said Mohapatra. "But a closure really impacts people in terms of how far they have to travel to get care."

Replay's patients are heartbroken.

"Other kids with disabilities will be impacted," said Hartman. "I can't tell you how well ran of a facility this is and how well they treat you."

They'll have to get care somewhere else, and patients know 121 employees are now in limbo.

Patients wonder if federal stimulus money could have been used to keep these two Howard County facilities open.

"I don't know how they can allow this to happen," said Howard. "I think there's a way if they dig deep they can save one or more of these facilities."

STATEMENT FROM U.S. CONGRESSMAN JIM BAIRD

"Our office continues to monitor that the use of taxpayer funds are used accordingly to the CARES Act. If adjustments to the rules and guidelines are needed, our office will work with the administration to provide the necessary flexibility like we recently did with the PPP Flexibility Act.

The CARES Act had several major components to it. One component was the Paycheck Protection Program, which was meant to help businesses retain employees during state-ordered lockdowns. A separate part was funding for the Department of Health and Human Services to distribute to state and local health care providers. Those funds are meant to help health care providers deal with the additional stress COVID-19 has put on them—the guidelines and rules on how the funding can be used help prevent fraud and abuse.

Our office continues to monitor that the use of taxpayer funds is used accordingly to the CARES Act. If adjustments to the rules and guidelines are needed, our office will work with the administration to provide the necessary flexibility like we recently did with the PPP Flexibility Act."

STATEMENT FROM KOKOMO MAYOR TYLER MOORE

"Needless to say, many of us here in Kokomo were taken surprise by Community Health's decision to close both their Replay Physical Therapy Clinic and West Campus facility. I have spoken briefly with Community Health's Senior Vice President of the Howard Region, Joseph Hooper, to get information and answers, and it appears that this was a decision made after years of attempting to put both of these facilities on better financial footings. Nothing was mentioned—nor did I inquire—as to the amount and application of any CARES Act funding they may have received specifically for Community Howard Regional Health in Kokomo. My administration is planning on continuing to have conversations with both Community Howard Health and Ascension/St. Vincent Health to see how this will affect the availability of services provided by each hospital and other local private clinics—as well as any assistance we may be able to give the therapists, staff, and families directly affected by this decision."

FULL STATEMENT FROM COMMUNITY HEALTH NETWORK ON CLOSURES

"After a thorough evaluation of the needs of this community, the changing landscape of healthcare and how to best align Community Howard Regional Health's services to sustainably meet those needs both now and in the future, a decision has been reached to end operations at Community Howard Specialty Hospital and Replay Physical Therapy.

In line with this decision, Community Howard Specialty Hospital, which is home to an inpatient rehab facility, outpatient therapy services and a sleep study lab, will close its Dixon Road campus effective August 30. Replay Physical Therapy, which operates under the license of Community Howard Specialty Hospital, will also be closing.

Current patients at both facilities will continue to receive the same level of high quality, compassionate care. Replay Physical Therapy's sports medicine program at area schools will not be impacted by the future closure.

As a nonprofit healthcare system, Community Health Network has a responsibility to constantly analyze the needs of the communities it serves as well as changes in the landscape of healthcare. Community remains committed to serving the greater Howard County region, and these changes, while difficult, will continue to put Community Health Network and Community Howard Regional Health on the best path forward to achieving that mission over the long-term."