The primary unexpected bill arrived in December, just weeks before Tara Lovell’s husband of 40 years died from bladder cancer.
Lovell worked as an ultrasound technologist on the local hospital, in Mexico, Missouri, and was paying greater than $400 each month for medical health insurance through her job. The town’s struggling hospital, the only health care provider and major employer, had modified ownership in recent times and had been sold to Noble Health, a non-public equity-backed startup whose managers had never run a hospital.
One yr later, facing staggering debt and a pile of lawsuits, Noble closed Audrain Community Hospital and one other it owned in a neighboring county.
Now, Noble Health is the topic of at the least two federal investigations.
Because the hospitals collapsed, Lovell and the facilities’ doctors, nurses, and patients saw evidence that the brand new owners were skimping on services — failing to pay for and stock surgical supplies and medicines. For instance, in Callaway County, Missouri, state inspectors deemed conditions within the hospital to be endangering patients.
What was less apparent, former employees said, was that Noble had also stopped paying for worker health, dental, vision and life insurance advantages. They were unknowingly uninsured.
Lovell and others said they realized — after comparing notes about canceled dental appointments, out-of-pocket costs for glasses and surprise bills — that Noble had taken money from their paychecks for advantages but did not pay for coverage.
Lovell took day without work to take care of her husband in June 2021 and requested full-time leave in August. She retired Dec. 31, 2021, but paid Noble for insurance until March 2022.
She said she faces $250,000 to $300,000 in medical bills from the last months of her husband’s life.
“None of us knew until it was too late,” Lovell said. “All that they had to do was tell us that we didn’t have insurance.”
The U.S. Department of Labor’s Worker Advantages Security Administration, after receiving complaints from Lovell and other employees about surprise medical bills and the lack of life insurance advantages, launched an investigation in early March, in response to a DOL letter sent to the corporate and obtained by KHN. Scott Allen, an agency spokesperson, declined to comment or confirm the investigation.
The agency confirmed a second investigation by a distinct division, Wage and Hour, into Noble’s management of its Audrain hospital and clinic.
DOL spokesperson Edwin Nieves didn’t offer details because “it could jeopardize an investigation.”
The inquiries could take greater than a yr and will end in penalties and payment of back advantages and wages, as required by federal law. The cases may be referred to the U.S. Justice Department for criminal inquiries.
Noble closed the hospitals in late March, citing on social media “a technology issue” and a have to “restructure their operations.”
Interviews with former employees and a review of Noble documents and internal communications offer a portrait of a business in free fall. Employees were shorted their pay and advantages. Vendors sued over greater than $4 million in unpaid bills, lawsuits show. And as its crisis deepened, Noble borrowed nearly $10 million in dangerous loans with rates of interest from 25% to 50%, in response to former employees with knowledge of the corporate’s funds.
No Noble executive responded to requests for interviews or to specific questions.
Why Noble was in such dire straits is unclear: The corporate, which acquired each hospitals in the course of the pandemic, accepted nearly $20 million in federal COVID-19 relief funds, including $4.8 million from paycheck protection programs, in response to public records.
On April 20, Noble sold each hospitals — for $2 — to Texas-based Platinum Neighbors, which assumed all liabilities, in response to the sales agreement.
The day before, Platinum Health Systems President Cory Countryman, in a pointy blue suit, promised to do right by employees as they gathered within the Audrain hospital cafeteria, most wearing jeans and sneakers, in response to a video shared with KHN.
“Several things are going to be on the priority list for us. Get everybody paid as much as where they ought to be. That’s you guys,” Countryman said. He also said the corporate would reopen the hospitals. Months later, neither has happened.
Countryman didn’t reply to a reporter’s questions for this text.
Amy O’Brien, chief executive of the Audrain hospital, said “the doctors and staff are hanging in here with us and really fighting for the community and the patients they serve.”
Platinum hopes to open Audrain in September, O’Brien said. She declined to comment on the hospital in Callaway County.
An ‘evil’ company jeopardizes people’s funds
Rural hospital closures aren’t unusual — 140 have failed nationwide since 2010. Most frequently, they slowly fade away because payments for the standard patient base — people who find themselves uninsured or covered by low-paying government programs — can now not sustain modern care.
But Lovell said Noble’s methods felt particularly “evil.”
At 64 years old, Lovell lost her husband and left her job. Now she fears the unpaid medical bills will jeopardize her financial security.
“I can’t imagine they’d do that to human beings,” she said.
Noble’s funds were buckling by the point Lovell and others said they realized they were uninsured, KHN found.
Noble Health was launched in late 2019 by Nueterra Capital, a enterprise capital and private-equity firm. Noble later bought Callaway Community Hospital, which Nueterra has previously owned, after which Audrain.
A Missouri state filing lists Noble Health’s directors as Nueterra Chairman Daniel Tasset and Donald R. Peterson. Its executives included Tom Carter and, eventually, William A. “Drew” Solomon.
In a March email to KHN, Peterson said they created the corporate to “save a rural hospital that was about to shut.”
Tasset didn’t reply to requests for comment, and Peterson said he was unavailable for an interview.
Although the Centers for Medicare & Medicaid Services vets such purchases, these seemed less-than-ideal buyers: None had experience running a hospital, and Peterson had been accused of Medicare fraud. Peterson settled that case without admitting wrongdoing and agreed to be excluded for five years from Medicare, Medicaid and all other federal health care programs, in response to the U.S. Health and Human Services Department’s Office of Inspector General.
Greater than a dozen lawsuits were filed in Missouri courts alleging Noble owed money to vendors and contractors that provided services including nursing, landscaping, food and COVID-19 testing. In nearly half of the lawsuits, judgments have been entered against Noble, a lot of them for “failing to look.”
Shortly after Noble took over the Audrain hospital, Kristy Melton, the ability’s blood bank supervisor, received an email from its blood supplier saying it hadn’t been paid for several months. Patient care deteriorated: The Callaway hospital was considered so “in danger” that state health department inspectors removed its patients.
Melton, 63, had worked on the Audrain hospital for nearly 25 years. As of July, neither Noble nor Platinum had fully paid her wages, she said. Melton and others are counting on unemployment advantages, she said, adding that hers are set to finish in September.
In late June, Platinum requested Missouri officials extend a deadline to reopen the hospitals to September.
Whether Platinum, a non-public company, realized the extent of the liabilities, or debt, it accepted when purchasing Noble Health is unclear.
One former high-level Noble Health worker, who spoke on the condition of anonymity due to fear of litigation, estimated the corporate’s debt totaled $45 million to $50 million, including what was owed to vendors and on greater than a dozen high-interest loans from multiple lenders.
Noble acquired its first high-interest loan in August 2021, the worker said, and received the ultimate one — at 48% interest — the month before the hospitals closed.
“Where did all the cash go for the taxes and advantages?” the worker said in an interview. “I’d get a forensic auditor in there.”
One lender, Itria Ventures, is a subsidiary of Biz2Credit, a Recent York-based online lender. In a lawsuit filed in April, Itria alleges Noble did not pay on three loans it took out in January.
Itria, which lends to businesses, works much the identical way as payday lenders do: Noble borrowed nearly $2 million, with rates of interest of 25%, promising to pay it off inside seven months. Itria expected weekly installments of $67,000. Noble stopped paying in early March, in response to the lawsuit. Noble has not responded to Itria’s claims, but court records show it has asked for more time to accomplish that.
‘I didn’t have real insurance’
In early April, Noble Health emailed employees, saying “we will’t inform you how sorry we’re that you just’re in this case” and assuring them that their medical, dental and vision coverage would remain in place “at the least through April 30, 2022.”
By then, hospital employees knew higher.
Radiology technician Jana Wolthuis had taken screenshots showing her dental and vision coverage was “terminated as of 1/31/2022.” Later, the insurer asked Wolthuis to assist claw back $240.40 it “overpaid” the dentist.
Melton was calling the insurer before every appointment. She had already paid greater than $1,400 for dental bills that weren’t covered.
“I used to be extremely gun-shy,” she said, noting that she had an insurance card but “I didn’t have real insurance.”
In March, the Health Cooperative of Missouri, which had been hired in January as Noble’s insurance broker, detailed the missing payments to Noble’s leadership team in a presentation. As of March 16, Noble owed greater than $307,000 in outstanding premiums to Principal, Humana, HealthEZ and The Hartford.
“Over the past 11 weeks all the worker advantages plans have been terminated or have had potential termination for lack of payment,” the presentation deck stated, adding that Noble was the broker’s only client that didn’t have an automatic electronic withdrawal.
This had come up earlier, too.
In 2021, Meritain administered Noble’s self-insured advantages plan, which meant it was paid a fee to process claims for hospital employees’ medical, dental and vision insurance. Noble was presupposed to pay the fee and fund the plan.
Peterson, Noble’s executive chairman, had not approved the automated bank withdrawals for Meritain’s administration fees, in response to a Noble email shared with KHN.
When sent forms to establish electronic withdrawals, the e-mail shows, Peterson passed the message on to others, writing: “I hope you guys are handling this. — Don.”
The e-mail showed Meritain couldn’t access funds to pay its fees for Audrain hospital since Noble bought it in March 2021. Callaway fees had not been paid in July and August 2021.
Noble’s Meritain account appears to be a spotlight of the Labor Department’s worker profit investigation, in response to the March 2 letter sent to Solomon.
Federal investigator Casey Branning requested documents and interviews with Noble leaders and indicated the agency would examine the Noble People Worker Profit Plan, the corporate’s human resource subsidiary. Solomon couldn’t be reached for comment.
The investigator’s eight-page letter asked for agreements, payroll records and more. One bulleted item: copies of payments to Meritain. One other was for “any and all correspondence with employees regarding the Plan and any failure to fund claims.”
Tara Lovell’s husband, Donald, the cancer patient, was not the one former worker or member of the family to suffer.
The family of Michael Batty, 63, a hospital janitor who had an aortic aneurysm at work in January, said that they had no idea his life insurance had been terminated for nonpayment. His daughter, Stephanie Hinnah, was the beneficiary of the policy — with an expected payout of $60,000. She was initially told she wouldn’t get a cent since the policy had lapsed before her father’s death.
Hinnah, who endured months of stress, said her father wouldn’t have wanted to depart his daughter in debt. Unfortunately, she said, “my dad doesn’t really have a voice to talk about it.”
To pay for her father’s cremation, Hinnah raised $700 by selling Batty’s belongings in a garage sale. She said she owed the funeral home about $8,000. She filed an appeal to her insurance provider, and months passed. In late July, after KHN contacted The Hartford, a spokesperson, Suzanne Barlyn, told KHN that “after further review” the insurer would pay the advantages.
Kaiser Health News is a national newsroom that produces in-depth journalism about health issues. Along with Policy Evaluation and Polling, KHN is one among the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.