Community Hospital Consulting, the management and consulting arm of Community Hospital Corp., has announced a five-year management agreement with Southwest Health System.
Management services by CHC Consulting began on July 1, according to a news release from Southwest Health spokeswoman Haley Saunders.
On June 27, the health system’s board of directors unanimously approved the new relationship, according to board chairman Paul Deshayes.
“CHC’s mission to guide, support and enhance the mission of community hospitals and health care providers aligns with the SHS mission to serve its community with quality health care for years to come,” said CHC Vice President Craig Sims.
CHC Consulting assumes day-to-day operational responsibility for the health system, which has begun an assessment of the Southwest Health System. The assessment includes the development of specific departmental actions plans and the implementation of recommendations for cost reduction and revenue enhancement, Saunders said in the news release.
Southwest Health System faces financial challenges including a bond violation, but a new CEO said he believes the problems can be overcome.
Anthony Sudduth, of Community Hospital Corp,. was hired in April as the interim CEO of Southwest Health System, a private nonprofit based in Cortez that contracts to operate the publicly owned Southwest Memorial Hospital.
He replaced Kent Rogers, who was fired along with several other top executives.
In a report to the Montezuma County Board of Commissioners in May, Sudduth said the hospital has a cash flow problem and is out of compliance with the bonding obligation tied to the financing of the hospital expansion.
Under the bonding agreement, Southwest Health System is required to keep enough cash on hand to operate the hospital for 81 days, Sudduth said, but it only had 15 days’ worth. A forbearance agreement is negotiated between a lender and a borrower to allow time for corrective actions to prevent default.
Sudduth said one of Southwest Health’s strategies to improve its cash position was rebilling Medicaid for 11,000 claims. He added that its deadline is August.
CHC Consulting is also providing interim CFO services for Southwest Health System. On June 5, Sam Radke became interim CFO.
Southwest Health System is composed of 10 clinics and Southwest Memorial Hospital.
CHC Consulting specializes in the management of smaller, community-based hospitals across the country.