Las Vegas Bankruptcy Attorneys Fear Hospital’s Bankruptcy Could Endanger Community’s Health
Tonopah, Nevada, the rural county seat of Nye County with a population of about 2,500 residents and located about halfway between Reno and Las Vegas has just one hospital – and it has just declared bankruptcy. The Las Vegas Review Journal reports that the community of Tonopah will surely feel the effects if Nye Regional Medical Center is forced to close, as many residents who experience medical emergencies or need extensive or extended care would be more than 100 miles away from a facility that could serve them.
Operating under the nonprofit corporation Primecare Nevada Inc., the Nye Regional Medical Center has experienced financial struggles for several years, but only filed for Chapter 11 Bankruptcy late last year. A Las Vegas bankruptcy attorney might be confused when first reviewing the hospital’s balance sheet: $14.4 million in assets and only $5.9 million in liabilities don’t exactly signify financial trouble. Upon further inspection, though, one realizes that half the assets were classified on accounts payable from private pay patients. Many of these private pay patients lack insurance and often pay only a fraction of their bills, or nothing at all. Those funds aren’t likely to be coming in any time soon.
As if he were recounting his woes to a Las Vegas bankruptcy attorney, hospital administrator Vincent Scoccia enumerates how he was financially blindsided by events in the past two years. The first was the requirement that the hospital reprogram their payment systems to fit a new one to accommodate both Medicare and Medicaid programs in January. But the state and federal governments delayed their switch until April, resulting in a critical delay in cash-flow. The second financial hardship was the imperative to launch a new computer record keeping system to comply with federal regulations for electronic health records. The government had promised to pay $3.2 million in a grant to help, but Nye Regional Medical Center saw only $600,000 of it.
Meetings with accountants and a Las Vegas bankruptcy attorney promised debt restructuring and payment plans for equipment from vendors, but soon the cost of the new health records system ($2.8 million in a promissory note to a contractor in Alabama) loomed closer to default. The filing of the Chapter 11 bankruptcy prevented the threat to turn off the system and effectively shut down the hospital with it.
As of yet, the hospital hasn’t revealed a plan by which it will emerge from bankruptcy, and administrators acknowledge that the challenges facing a rural hospital – like attracting medical personnel to small towns and generating enough revenues to cover costs – remain. Scoccia purchased the then-failing hospital from the county 15 years ago through a complex structure of individually owned companies in an attempt to establish credit for the hospital, but the Las Vegas bankruptcy attorney is fretful about the creditors’ future potential to regain financial standing after the bankruptcy filing. Scoccia himself reports that he has not collected his own $120,000-a-year salary as an administrator for the last six years. But it won’t be enough, and now the Tonopah community is anxious for the future state of their hospital.