A judge will decide today whether some Hutcheson Medical Center employees will lose their jobs the week of Thanksgiving.
With bankruptcy trustee Ronald Glass pushing for the hospital to begin its shutdown this week, Hutcheson leaders are arguing they have enough money to continue operating at least until Dec. 21. An attorney for Walker County - one of three local governments that help manage the hospital - filed a motion Monday asking U.S. Bankruptcy Court Judge Paul Bonapfel to keep the doors open.
Bonapfel will hear arguments on the issue today at 10 a.m.
Bonapfel appointed Glass to oversee Hutcheson's finances in September - at Hutcheson's request. But soon after studying the hospital, Glass moved to lay off employees and close several hospital services. Then, on Nov. 5, Bonapfel granted Glass' request to shut down the whole hospital.
Glass, who did not return a call seeking comment Monday, told the Times Free Press last month the hospital did not see enough patients to continue operating. Because state law mandates a somewhat slow process for shutting down the hospital, Hutcheson is scheduled to remain open until Dec. 4.
But Glass wants the shutdown to happen gradually. That was supposed to mean Hutcheson CEO Farrell Hayes would begin laying off remaining employees, last estimated at around 350, Monday. Glass planned for the hospital to close inpatient services Friday, short-stay observation Dec. 1 and the emergency room at 8 a.m. Dec. 4.
Hutcheson's leaders, however, insist the hospital can stay open at least a couple of extra weeks. They say this will help them sell it to a potential suitor. But if it shuts down, they say, any sale will be much more difficult - maybe impossible.
Attorney Stuart James questions an official in this May 14, 2013, file photo.Stuart James, an attorney representing Walker County, filed a motion Monday asking Bonapfel to let the hospital remain open through Dec. 21. He said the hospital has received offers from Prime Healthcare Services and Apollo Healthcare. Though he doesn't know the specifics of Apollo's offer, James said Prime Healthcare is offering to buy the hospital and the ambulatory surgery center for $7 million.
The hospital is supposed to auction its properties to any interested buyers on Dec. 3.
"It is against the interest of the hospital for the trustee to lay off employees with the two bids pending or to be submitted," James wrote.
He added: "The employees of the hospital are continuing to work at the hospital and are the 'hard-core employees' who believe in the hospital and will continue working."
Hutcheson Chief Operating Officer Kevin Hopkins wrote in an affidavit that the hospital should be able to function without layoffs through Dec. 21 because the state government will give Hutcheson $770,000 on Dec. 3 for being a disproportionate share hospital. That is a designation Hutcheson receives for providing care to patients without insurance. To help offset lost money for treating these patients, the hospital gets payments from the state government at different points in the year. This extra $770,000 should be enough to keep the lights on, Hopkins said.
Hutcheson's last-minute effort is supposed to help it find a buyer, who could take over the hospital before Hutcheson closes. That would mean hundreds of employees could keep their jobs, and Catoosa and Walker county residents could still go to a local hospital.
But the offers from Prime Healthcare and Apollo might not stand. When Hutcheson filed for bankruptcy last November, a court filing shows, the hospital was about $80 million in debt. It added another $6 million as of August.
Of the creditors waiting to get their money back, Regions Bank and Erlanger Health System expect the most. As of December, according to Hutcheson's bankruptcy filing, the hospital owed Regions about $33 million for defaulting on bond payments.
Erlanger, meanwhile, gave Hutcheson a $20 million line of credit in 2011. According to an October court filing, Erlanger's lawyers say the interest on that loan has grown so much that Hutcheson now owes the Chattanooga hospital $32 million.
Regions and Erlanger's debts are both secured. If Hutcheson cannot pay back Regions, the bank will move to foreclose on Hutcheson's ambulatory surgery center on Battlefield Parkway. And if Hutcheson cannot pay back Erlanger, the Chattanooga hospital will move to foreclose on Hutcheson's main campus in Fort Oglethorpe.
If it does not get its full amount from foreclosing on the main campus, Erlanger can also get money from Catoosa and Walker counties, where local commissioners guaranteed that 2011 loan. If Erlanger needs $20 million, both counties would have to split the bill.
On Monday, Hutcheson employees said they had not received word from administrators about whether they will lose their jobs this week. One employee, who didn't want to be named for fear of reprisal, said she talked to her director to make sure she should still be at the hospital. She was told to continue working.
If the hospital can stay open through Dec. 21, the employees will be able to work until Christmas - almost.
"I'm good with it either way at this point," the employee said, when asked whether she feared being laid off. "They put us on an emotional roller coaster."
Cancer center hoping to stay open
In a report filed with the bankruptcy court Friday, Susan Goodman said patients receiving chemotherapy at Hutcheson's Ambulatory Care Center will undergo their final "treatment cycles" before the Dec. 4 closure.
However, the physician managing radiation therapy hopes the hospital can keep his services open through Dec. 18. Even if the hospital closes Dec. 4, the physician could keep his service open later if the Georgia Department of Community Health grants him a waiver.
The hospital is supposed to show Goodman, the court-appointed ombudsman tasked with telling the judge how the hospital is treating patients, proof as to whether the physician received that waiver by today.
If Goodman does not see that proof, the physician's patients will need to go to another hospital.
Contact staff writer Tyler Jett at tjett@timesfreepress.com or at 423-757-6476.