Continuously serving Kosciusko County since 1854
The Kosciusko Community Hospital board of directors approved by a 14-2 vote Monday the sale of the facility to Quorum Health Group of Brentwood, Tenn.
Terms of the purchase will not be disclosed until after the official closing of the deal and the transfer of ownership take place, expected by Feb. 1, according to KCH President Wayne Hendrix.
"(Board chairman) Willis Alt will announce the sale price and the proceeds going to the Kosciusko 21st Century Foundation being formed, after the final proceeds are known," he said today.
The closing procedures began today, but it will take several days to complete all the paperwork, Hendrix added.
Alt said the foundation will receive all the net proceeds from the sale and they will be invested and used to make grants to various health and quality of life programs in the county.
The sale has not met with universal support and the Indiana attorney general, acting on a request by local attorney Paul Refior, is looking into the sale. At the heart of Refior's complaint is the non-disclosure agreement KCH board members were forced to sign in regarding the sale of the hospital to Quorum.
"The attorney general considers this type of (secret) activity wrong. Last year, he introduced legislation to prohibit this, but the lobbyists for the health corporations fought it on the grounds that it was not needed because there were no examples of health corporations keeping details of their acquisition of not-for-profit facilities," he said. "Now, he'll have Warsaw as an example."
Refior added he does not believe the sale can be stopped at this point, but it may be used to prevent other such sales in the state in the future.
"The horse may be out of the barn this time. But at least now the attorney general will have an example of how this type of activity can hurt the community," he said.
Rich Snyder, spokesman for the attorney general's office, confirms Attorney General Jeff Modisett is looking into the KCH-Quorum transaction and will likely used it to reintroduce legislation to prohibit secret sales of public hospitals in the future.
"The attorney general has received information about this sale that does cause him concern," Snyder said. "Specifically, that the community is not receiving some of the information it should be receiving about the sale. He proposed legislation last year that would have given the community the right to have that information before the sale was completed.
"We're determining whether there is any further action this office can take in this case," he added.
Refior said another matter that concerns him is that the KCH board members may have been given false information in the sale documents about three members of the Health Net board of directors. Health Net is a subsidiary of KCH and serves as the holding company for all KCH and health- related properties. The Health Net board was asked to ratify the sale of KCH to Quorum.
Refior said Dane Miller, president of Biomet Inc. and a member of the Health Net board of directors, was informed by a KCH board member that Miller and board members Larry Teghtmeyer and George Clemens had resigned from the Health Net board.
Miller confirmed he was told about the resignation allegations, but has not seen the documentation. He said the KCH board asked the directors of Health Net to approve the sale, but the Health Net board has taken no action on the request because they were not provided with sufficient information to make a sound decision.
"We were provided an incomplete copy of a letter of intent and of the purchase agreement," Miller said. "Since we didn't have complete terms of the sale and couldn't agree to sign the confidentiality agreement, we took no action on the request."
Miller added the documentation the Health Net board was provided did not contain the sale price, and because Quorum wanted no public disclosure, he couldn't agree to the consideration of the transaction.
"This community has contributed greatly to the development of the hospital over the years," he said. "I just couldn't sign a confidentiality agreement."
Miller added that he has not resigned from the Health Net board of directors, nor, to his knowledge, has any other director.
"I haven't received any communication from the KCH board that the three of us have been relieved from the Health Net board," he said. "I have not resigned, and I'm very confident that neither Teghtmeyer nor Clemens has resigned either."
Teghtmeyer confirmed that he has not resigned from the Health Net board and that the board simply took no action on the sale of KCH.
"The board adjourned without approving or disapproving the sale at our Jan. 18 meeting," he said. "We just didn't have time to consider it."
KCH board chairman Willis Alt confirmed no member of the Health Net board resigned. The Health Net board was disbanded and replaced by a new board headed by Alt.
"The three (Miller, Teghtmeyer and Clemens) asked that they be removed from the Health Net board," he said. "The KCH board approved the appointment of a new board Monday."
Clemens said that neither he, Miller nor Teghtmeyer requested to be removed, either. The board was, in effect, disbanded when they refused to approve the sale of KCH property to Quorum.
"We didn't request to be removed and we didn't resign," Clemens said. "We simply refused to sign over the assets of Health Net until we had complete information on the sale."
The other two members of the old Health Net board were Wayne Hendrix and Steve Miller. Members of the new Health Net board, which approved the sale to Quorum are Alt, Avis Gunter, Pat Oppenheim, John Davis and John Hall.
