The Audrain Community Hospital, Paul Huemann’s workplace for 32 years, has been letting workers go.
Word travels quickly in a small town. Heyman’s wife, Kim, first heard the bad news in the car when a friend who got the message texted him.
“The termination of employment was not expected,” read the letter, dated September 8 and signed by Platinum Health Systems, adding that the shooting was always “without recourse” and that “the medical facility will be closed.”
“I don’t know what my next steps are,” said Heymann, 52, who oversaw the lab at Audren Hospital.
The futures of Huemanns, hundreds of other workers, and thousands of patients in two small Missouri towns began to unravel long before that afternoon. The drama set in Paul Huemann’s hometown is familiar to many who live in rural America: communities are so desperate to keep their hospital open that they are willing to gamble on any buyer, including those backed by private equity.
Sometimes they lose.
Noble Health, a three-year-old private equity-backed startup, has acquired Audren and nearby Calaway Community Hospital during the pandemic. State records show that in March, it suspended all hospital services, then later fired 181 employees..
Noble — facing massive debt, more than a dozen lawsuits, and at least two federal investigations — struck a deal to sell the hospitals in April to Platinum Neighbors, a subsidiary of Texas-based Platinum Team Management and Platinum Health Systems. In late June, Platinum asked Missouri officials to extend the deadline to September 21 to reopen hospitals. Platinum officials told KHN that they have asked Missouri regulators for an additional 30-day extension “on behalf of Noble” in an effort to explore all alternatives to reopening these facilities,” Ryan Gordon, Platinum’s director of marketing, said Tuesday. And rear-wheel drive is of paramount importance.”
Hours before the licensing deadline on Wednesday, Platinum filed for a 90-day changeover. Lisa Cox, a spokeswoman for the Missouri Department of Health and Senior Services, said Missouri regulations do not allow for another extension within a year. She said the state “worked with them” and agreed to the request.
Platinum said hospitals need time to complete construction projects. Audrain’s “emergency room area” has broken windows, and Callaway Hospital needs “critical plumbing repairs,” according to a state approval letter. Cox said hospitals can change ownership within 90 days.
Cory Countryman, president of Platinum Health Systems, confirmed the termination of the remainder of the hospital staff. “We are working with multiple partners to reopen hospitals,” he said.
This may include a new owner. One possibility is Owen Schuler, a Georgia-based businessman, who said he’s considering buying it. “I love what I see,” said Schuller, who was contacted by phone after visiting rural communities.
said Schuller, whose companies include Bankers Realty Corp. and Shuler Capital Corp. “It’s heartbreaking what happened.” If he buys hospitals, he will do so as managing director of his new venture, CareONE Global. “In terms of due diligence, I don’t like what I see and learn,” he said. What he concluded from his review was that “private capital and venture capital should be kept out of health care.”
On his LinkedIn profile, Schuller said he “brings a lifelong perspective from a family-owned skilled care business” as well as his expertise in “telemedicine and healthcare services.”
Schuller, who emphasized that hospitals are saddled with significant debt — “in the ballpark” of $45 million to $50 million — said, “I’m not ready to sign up for business strategy yet.” He said his approach would be “holistic” and would include telehealth. Many industry leaders have argued that telehealth is a way to bring high-quality medicines to rural communities that cannot afford, and do not need, an entire platoon of on-site specialists.
“Our goal is to have hospitals in rural and disadvantaged areas and bring our capabilities to them,” Schuler said, adding that fixing a “fundamentally broken” Missouri hospital from the bottom up would be “much easier than trying to get into a health system.”
However, it is unclear if Shuler or another buyer will come and what it will take for them to reopen after years of ownership instability and financial troubles.
Venture capital and private equity firm Nueterra Capital launched Noble in December 2019 with CEOs who had never run a hospital, including Donald R. Peterson, a co-founder who before joining Noble was accused of Medicare fraud. Peterson settled the case without admitting wrongdoing, and in August 2019 agreed to a five-year exclusion from Medicare, Medicaid and all other federal health programs, according to the Office of the Inspector General of Health and Human Services.
Federal regulators did not block the takeover in which Peterson was involved. “All proprietary and control management information is self-reported,” said Kristen Clemens, a spokeswoman for the Centers for Medicare and Medicaid Services.
It didn’t take long for the problems to appear under Noble Health’s supervision. Noble has accepted nearly $20 million in federal COVID-19 relief funds, including $4.8 million from payroll protection programs, according to public records.
However, doctors, nurses, and patients saw evidence that the new owners were underserving – failing to pay and stockpile surgical supplies and medicines. In Calaway, state inspectors determined that conditions in the hospital put patients at risk. The former workers submitted KHN invoices and payment receipts that they said showed Noble had also stopped paying employees health, dental, vision and life insurance benefits.
After employees filed complaints about sudden medical bills, the Department of Labor’s Employee Benefits Security Administration launched an investigation in early March, according to a letter sent to the company and obtained by KHN. The department confirmed a second investigation by another of its departments, Wages and Hours, into Nobel’s management of Audren’s Hospital and Clinic.
In April, Noble concluded a deal to sell both hospitals for $2 and transfer the shares to Platinum, which incurred all obligations, according to the agreement. In a June 22 letter to government regulators about hospital operating licenses, Platinum said, “We are asking for this continuity as Noble Health’s stock has been transferred to Platinum Medical Management.”
While visiting hospitals in April, Countryman told employees that paying back the wages Noble owes them is a “priority.”
Neither Noble nor Platinum has made it through in the months since, employees say. In addition to the federal investigation, nine wage claims — the largest of which is $355,000 — have been filed against Noble in Kansas, according to data provided through the Kansas Open Records Act Order.
By early August, others were learning about employee complaints. The manager, who provided dental and vision care coverage, sent letters to workers saying that no worker would demand payment of benefits covered by the insurance company after Noble stopped sending premiums to cover employees. “This situation is not typical,” principal spokeswoman Ashley Miller wrote in an email.
Huemann, as a laboratory supervisor, was among the workers not furloughed in the spring. They went to work every day in the hope of reopening Audren’s Hospital. Huemann checked the reagents and kept the machines running even as funds for supplies ran short.
We couldn’t have anything, so we were living with what we had,” Heymann said.
Huemann, who provided salary receipts to KHN, said he received a salary from Noble in late March. He said he didn’t get another paycheck until late May. He received regular salaries in June and early July. But his second check in July, under platinum, was a week late. His last salary arrived on August 8 and he was also late.
The last seven checks came from three companies. They were all under Platinum’s watch: first Platinum Neighbors issued the checks, then Callaway County Community Hospital, and finally Noble Health Audrain Inc.
“Everyone cashed the check as soon as they got it,” Huemann said. “There are a lot of red flags. But you know, we are at their mercy, we have no control, and we are still thankful that they save us.”
The check stub also shows that hospital operators deducted $1,385 total from Hoymann Insurance’s wages. Medical insurance was supposed to be with Blue Cross and Blue Shield of Texas, but Huemann said he never received a card and couldn’t confirm coverage.
“I called four or five times on different days,” he said. “They couldn’t find me no matter how they looked at me, with Social Security or birthday, or anything.”
Countryman has referred all financial questions to Platinum Corporation’s offices. Ryan Cole, CEO of Platinum Team, did not directly respond to calls and emails seeking comment.
Some doctors have left town as the turmoil has swallowed up hospitals.
Others, such as family medicine physician Dianne Jacoby and her nurse Regina Hill, joined MU Health Care, affiliated with the University of Missouri, in Mexico, Missouri, the city of 11,000 people where Audrain Community Hospital is located.
Jacobi said her patients want local care. “I don’t know if you’re a mama,” she said, “but if you’re in labour, the thought of spending 45 minutes in a car on the way to the hospital is nerve-wracking.” “It would be safer if you had an interest.”
Le Leonate, a lawyer who lives in Mexico, said he feels so strongly that the community needs a hospital and emergency care that he gave out Nobel loans last year so the company could pay salaries. Leonate’s $60,000 personal loan, with an interest rate of about 3 percent, was due in January, but he said it had not yet been repaid.
Leonati helped start the Sunrise Project, a local economic development group. If a new agreement is not reached, he said, “we would like to have a Plan B available.”
Peterson, who helped launch the failed Nobel effort to transform Missouri’s hospitals, appears to have found his plan B in Dubai. He wrote on LinkedIn: “I am sitting in the Emirates Airlines lounge in Dubai, marveling at the experience I had at the age of 68.” “I will be in Riyadh next week to finish my due diligence to start a new business there.”
This post angered Tonya Linthacum, a nurse who has worked at the Audrain Cancer Screening Center for more than two decades. She said it “ruined a lot of people’s lives and livelihoods,” adding, “Having someone cheat on you like that” and “carry on without consequences. It’s not the way the world is supposed to be.”
Peterson declined to comment.