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

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<p>The former operator of Yadkin Valley Community Hospital claims the county violated nondisclosure terms, had a conflict of interest and failed to negotiate in good faith.

By Taylor Sisk

The former operator of the Yadkin Valley Community Hospital has responded to a suit filed against it in May by the Yadkin County government and is countering with claims of its own.

CAH Acquisition Company 10 LLC, parent company of HMC/CAH Consolidated Inc., filed the counterclaim in the Eastern District of North Carolina federal court last Friday.

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

In June, that court found CAH to be in contempt for closing the 22-bed hospital when a temporary restraining order to keep it open was in effect. Judge Terrence Boyle ordered CAH to pay damages to Yadkin County for expenses the county incurred from the day the hospital closed until it reopens.

Those expenses will include the cost of around-the-clock EMT personnel, maintenance costs, attorney and consultant fees and employee compensation.

The for-profit CAH is now asking for a minimum of $75,000 from the county. It has also requested a jury trial.

A hearing on the county’s damages claim is expected to be held soon.

‘Deeply resent that’

On May 22, Yadkin County officials learned that CAH planned to shutdown the hospital the following morning. Later that afternoon, the county filed a temporary restraining order in superior court in Raleigh to keep the hospital open. But at 6:04 that evening, CAH closed the doors.

CAH officials alleged at the time that at approximately 5 p.m., the hospital was “surrounded by Yadkin Valley County Sheriff’s officers,” and administrators were informed that the hospital staff was being evicted, a claim CAH repeated in Friday’s countersuit.

In his June 16 ruling, Judge Boyle found no merit to this claim.

“They’re trying to stir up the community, and hope that something will stick with the people of the county and the surrounding area in trying to make us look like something that we absolutely are not,” County Attorney Edward Powell said on Tuesday, “and we deeply resent that.”

CAH also alleges that the county “secretly shared” information with administrators at Hugh Chatham Hospital – which was in negotiations to take over operations of the hospital – in violation of an agreement not to do so.

Powell refuted that claim as well, saying that CAH was itself sharing information with Hugh Chatham administrators.

CAH further alleges that Kevin Austin, chair of the Yadkin County Board of Commissioners, had a conflict of interest, in that he is also a member of the Hugh Chatham board of trustees.

The countersuit states that Austin should have recused himself at the outset of negotiations: “Had CAH known of Chairman Austin’s blatant conflict of interest, it would not have engaged in negotiations with Hugh Chatham.”

Powell said Austin informed a CAH administrator that he was considering joining the Hugh Chatham board, and that “the administrator thought it was a good idea to be on that board. So they were not surprised about that.”

“A very small degree of truth is all they ever need to weave their pattern of misstatements and outright falsehoods,” Powell said.

Trent Skaggs, a CAH senior vice president, said on Wednesday that he was unable to comment on the proceedings.

‘Eleventh-hour RFP’

CAH alleges that Yadkin County made an “abrupt and unexpected about-face” when, on Feb. 16, it put out a request for proposals for administration of the hospital with a March 19 deadline.

Yadkin Valley Community Hospital was shutdown by its operator, HMC/CAH, in May. Photo credit: Taylor Sisk

According to CAH’s countersuit, the RFP “greatly alarmed CAH, which was already – at the County’s express instruction – deep in its negotiations with Hugh Chatham for the sale of CAH’s ownership of the business and assets of the Hospital.”

That “eleventh-hour RFP,” the countersuit states, “thwarted the transition of the Hospital and made it impossible for CAH to close the sale of CAH’s business and assets of the Hospital to a new operator.”

The county, CAH alleges, “did not engage in a good-faith RFP process.”

In a statement released on Friday, Yadkin County Manager Lisa Hughes said, “The County did not act deceitfully nor unlawfully at any time. At no time has anyone acted inappropriately, and there has been no conspiracy of any nature whatsoever by anyone.

“Chairman Austin has been forthright in all his actions concerning this and all other County matters, and we look forward to the opportunity to spell out the true facts in this case.”

“We’re doing everything in a positive, ethical and legal fashion – and proper fashion – and we’re trying to move forward in finding a health care solution for the county that’s been dug a deep hole by HMC,” Powell said on Tuesday.

[box style=”2″]This story was made possible by a grant from the Winston-Salem Foundation to examine issues in rural health in North Carolina. [/box]

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