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Yadkin Valley Community Hospital Shuts Down, a Community Remains Hopeful


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A rural community hospital sits vacant after the company licensed to operate it shuts the doors.

By Taylor Sisk

“I don’t think the birds are actually chirping in Yadkinville at this time,” Mayor Hubert Gregory said on Monday.

It’s no surprise it feels that way to the mayor: The hospital in his town sits abandoned.

Yadkin Valley Community Hospital was shut down by its operator, HMC/CAH. The  community now awaits resolution.

Yadkin Valley Community Hospital was shut down by its operator, HMC/CAH. The
community now awaits resolution. Photo credit: Taylor Sisk

On Friday, May 22, just past 6 p.m., Yadkin Valley Community Hospital was shut down by HMC/CAH Consolidated Inc., the Missouri-based company licensed to operate it under a lease agreement with Yadkin County that runs through July 31.

Yadkin County Attorney Edward Powell said that around lunchtime that day, county officials received a call from Drexdal Pratt, director of the state Division of Health Service Regulation. According to Powell, Pratt said DHSR employees who were at the hospital conducting a regulatory survey had learned that hospital administrators planned to cease operations the following morning.

That afternoon, the county filed a temporary restraining order in superior court in Raleigh to keep the hospital open.

Records indicate that the restraining order was emailed at 5:59 p.m. to Dennis Davis, chief legal officer for Rural Community Hospitals of America, which manages the hospital for HMC/CAH. At 6:04, Davis responded, “The hospital is already closed.”

Meanwhile, according to affidavits filed by employees of the hospital, administrators told staff at around 6 p.m. to complete treatment of the remaining patients in the emergency department and discharge them, and began shutting down the hospital. According to the affidavits, the patients were discharged at about 6:40.

On May 29, HMC/CAH filed a motion for the case to be removed from state superior court and heard in federal district court. According to David Moxley, vice chair of the Yadkin County Board of Commissioners, “It may take a good while to get it on the federal docket.”

Which, said Powell, was HMC-CAH’s intent, calling the motion “purely a stalling tactic” to avoid having to resume operations.

Trent Scaggs, executive vice president of Rural Community Hospitals of America, replied to a request for comment that he was unable to do so due to the pending litigation.

Losing money

Moxley said the board of county commissioners had previously decided not to renew its lease with HMC/CAH, but had figured on having until the end of July to find a new provider.

An ambulance is stationed in front of Yadkin Valley Community Hospital ready to  address urgent needs.

An ambulance is stationed in front of Yadkin Valley Community Hospital, ready to address urgent needs. Photo credit: Taylor Sisk

With the closure, he said, “Trying to get some services back to citizens is going to be complicated, because the building lease is still theirs,” meaning HMC/CAH, “and we can’t go in and do anything until this is resolved.”

Negotiations between HMC/CAH and the county had not gone well.

In a May 22 letter to the state Department of Health and Human Services informing the agency of the company’s intention to shut down, hospital CEO Shawn Bright wrote that the lease renewal terms the county requested “are so onerous that the Hospital cannot accept them and still operate in a fiscally responsible manner.”

And in a subsequent press release, HMC/CAH officials wrote, “The closure is due to the County’s unwillingness to negotiate reasonable terms for a lease extension with Yadkin Valley Community Hospital.”

The release further stated that the hospital had offered to turn the license of the hospital over to the county, but that the county attorney had declined.

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Powell called both claims an “empty argument.”

“A contract to perform hospital functions for the county through July 31, 2015 is binding all the way through the term,” he said. “It has nothing to do with whether you’re negotiating a new term or not.”

Scaggs stated in court documents submitted at the time of closure that the hospital had lost $55,000 in May and stood to lose $300,000 in the next two months because it would have to pay staff “at least a 30% premium” to return.

Winding roads

Yadkin Valley Community Hospital is a critical access hospital, a designation given by the Centers for Medicare and Medicaid Services. Critical access hospitals receive special reimbursement to keep essential services in rural communities.

Sixty-six Bible verses have been posted on the “closed” sign in front of the hospital.

Sixty-six Bible verses have been posted on the “closed” sign in front of the hospital. Photo credit: Taylor Sisk

“The closure of any hospital has an impact on any community, but when they’re the only emergency provider of care it’s particularly challenging for the community,” said Julie Henry, a spokeswoman for the North Carolina Hospital Association.

“We have a lot of elderly citizens who don’t like to drive in I-40-type traffic,” Moxley said, “so they relied on our small hospital here for their doctors’ [appointments] and some acute care.”

Though Hugh Chatham Memorial Hospital in Elkin is only 22 miles away, it requires either driving winding country roads or getting on I-77, on which the speed limit is 70.

Yadkin Valley Community Hospital, Moxley said, “was close by, on a two-lane highway, not a lot of traffic for citizens to negotiate, and it was working well for a rural hospital.”

‘Clean break’

According to UNC-Chapel Hill health care economist Mark Holmes, rural hospitals across the country are affiliating with larger health care systems at an increasing rate.

Rural Rx: NC Health News coverage of rural health issues. This week: Yadkin County.

Rural Rx: NC Health News coverage of rural health issues. This week: Yadkin County.

“In some cases, this has been a reaction to challenging finances – affiliation or merger with a larger system may offer a smaller rural hospital the only option to remain viable,” Holmes said. “This can sometimes lead to a tension as the community gives up some of the local control that has historically been exerted by the hospital’s immediate community.”

At least for the immediate future, Yadkin County is looking to Hugh Chatham Memorial for a solution.

“We think it’s obvious with [HMC/CAH] abandoning the lease, abandoning their employees and high-tailing it out of town, that they have no intent ever to complete their obligation under their lease,” Powell said.

Hugh Chatham administrators have traveled to Raleigh with county officials to meet with DHHS about reopening the hospital. And Powell said the state has been in touch with the Centers for Medicare and Medicaid Services, and that CMS officials have said they’re willing to help expedite the process.

The hospital must have a Medicare and Medicaid number for billing purposes. Taking HMC/CAH’s number could mean assuming what Powell said is well over a million dollars in debt.

“What we’re trying now to do is get a clean break from HMC and get a new contract with Hugh Chatham,” he said, “and they will then have no obligation from HMC, and neither will the county.”

Faithful, hopeful

“[P]atients arrive for their scheduled appointments because they had received absolutely no warning from Defendants that they would close the Hospital,” the county’s attorneys wrote in their motion to federal district court for damages against HMC/CAH, “and Defendants provided no alternative care arrangements.”

“It’s been devastating to our community to have this hospital close down,” Mayor Gregory said. “I can’t leave the house without hearing someone talk about it.”

One of the Bible verses posted on the back of the "closed" sign in front of Yadkin Valley Regional. Photo credit: Taylor Sisk

One of the Bible verses posted on the back of the “closed” sign in front of Yadkin Valley Regional. Photo credit: Taylor Sisk

Gregory described how when his son, who had cystic fibrosis, was dying in 1980 the family chose to have him cared for at Hoots Memorial, as the hospital was previously known (HMC/CAH took over operations in May 2010).

“One time I went to visit my son at night,” he recalled, “and he and the nurses were sitting there working a puzzle.”

“They looked after him just like he was their own son,” Gregory said. “I could talk the rest of the evening about the good things that happened there.”

“North Carolina isn’t unique in having its rural hospitals face a lot of challenges in keeping their doors open,” the hospital association’s Julie Henry said. “It’s an opportunity for us to really focus on how hospitals are transforming to continue to meet the needs of their communities in a very challenging time.”

Meanwhile, the residents of Yadkin County await resolution.

Sixty-six Bible verses are taped on a “closed” sign out front of the hospital. A prayer vigil was held soon after the closure. “That’s what the people are leaning on,” Gregory said, in reference to their faith.

Some 150 of those community members are presently out of work. Powell said many of those were part time, but that he didn’t know the exact numbers because they were HMC/CAH employees.

“The people of the county are very concerned, the former employees are very concerned,” Powell said on Wednesday, “and we think rightly so.”

But, he added, “We’re very hopeful. We feel good about the progress.”

This story was made possible by a grant from the Winston-Salem Foundation to examine issues in rural health in North Carolina.

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